Environmental & Social Impact Assessments
The KfW Group sustainability mission statement(PDF, 182 KB, non-accessible) sets high standards which oblige all those involved to act in a sustainable manner.
In order to fulfil KfW Group's promotional mandate and simultaneously minimise potential negative effects on or risks to people and the environment, an appropriate Environmental and Social Impact Assessment (ESIA) is essential.
The group-wide exclusion list applies to all new financing activities. To shape new business in line with the temperature target of the Paris Climate Agreement and systematically strengthen the KfW-wide contribution to the transformation process, KfW has introduced Paris-compatible sector guidelines for selected greenhouse gas-intensive sectors. In addition, the projects to be financed are subject to an environmental and social impact assessment (ESIA).
KfW subjects all planned projects in developing countries and emerging economies, as well as all export and project financing, to an Environmental and Social Impact Assessment (ESIA) applying international standards, among others the Environmental and Social Standards (ESS) of the World Bank or the Performance Standards of the International Finance Corporation (IFC PS).
This commitment is set out in the sustainability guidelines issued by KfW Development Bank and KfW IPEX-Bank and is also a mandatory requirement under the DEG Guideline for environmental and social sustainability.
The ESIA follows similar procedures and standards in the relevant business sectors.
One component of the ESIA is risk screening, which assigns the risks to risk categories. The screening is followed by an in-depth appraisal. If the assessment shows that international environmental and social standards are not yet being met in some areas, measures to remedy this are defined. The implementation of the measures as well as regular reporting and review of their implementation are contractually agreed with the partners.
For the assessment as well as the implementation of any project with particularly high environmental and social risks environmental and social experts are being involved. Projects or investments that are likely to have an unacceptable environmental or social impact that cannot be avoided or mitigated by suitable measures are not eligible for funding.
The sustainability guideline for the domestic promotional business (German only) applies to the business sectors “SME Bank & Private Clients” and “Customised Finance & Public Clients”.
The guideline is based on common international practice and establishes a graduated assessment procedure for all funded projects with regard to environmental and social risks, depending in each case on the investment location and risk content of the financed projects.
The KfW Capital sustainability policy covers both the upfront assessment and subsequent monitoring of environmental and social aspects throughout the investment process, as well as impact management.
Further information on the environmental and social impact assessment processes in the respective business sectors can be found in the KfW Group DATA Sustainability Report
- KfW Group sustainability mission statement(PDF, 182 KB, non-accessible)
- Sustainability Guideline of KfW Development Bank
- DEG Guideline for environmental and social sustainability
- Guideline of KfW IPEX-Bank GmbH for environmentally and socially sound financing
- Sustainability guideline for the domestic promotional business
- Germany's National Sustainability Strategy
- KfW Capital Sustainability policy
- UNEP Statement by Financial Institutions on the Environment & Sustainable Development
- Principles for Responsible Investment (PRI)
- Performance Standards of the International Finance Corporation
- Environmental, Health, and Safety (EHS) Guidelines of the World Bank Group
- The 'Equator Principles'