Environmental Performance Management in practice - Examples from the Philippines

In February 2022, Cerise+SPTF released the updated Universal Standards 3.0. This third edition now includes a new Dimension 7 dedicated to Environmental Performance Management*. This addition reflects a growing awareness that we all have a role to play when it comes to facing environmental and climate challenges. And yet, what this looks like for actors in inclusive finance remains elusive for many.

What does it mean to manage environmental performance, in practice?

As part of a project in the Philippines, Cerise+SPTF and the Microfinance Council of the Philippines (MCPI) collaborated to strengthen local capacity in Environmental Performance Management in the inclusive finance sector. The objective was to enable MCPIs and local consultants to better support financial service providers (FSPs) in assessing and improving their environmental practices. After a training phase, awareness-raising sessions were held with FSPs, seven of which were selected to receive in-depth technical support, including an environmental assessment. To highlight the lessons learned from the project, three case studies have been published in collaboration with ASHI, K-Coop and OnePuhunan, to share concrete experiences, challenges encountered, and good practices in environmental performance in FSPs in the Philippines.

Discover below these three field experiences that can inspire your own efforts towards more responsible finance!

* Dimension 7 was developed by CERISE+SPTF in coordination with the e-MFP GICSF Action Group. Dimension 7 is fully aligned with the Green Index 3.0, which is the environmental performance evaluation tool developed and managed by the GICSF Action Group.

1. ASHI Case Study: Assess environmental performance and develop an environmental action plan.

Ahon Sa Hirap, Inc. (ASHI) is a Philippines microfinance institution inspired by the Grameen Bank Approach. “Ahon sa hirap” translates as rise from poverty. Since its early years, ASHI’s financial services for poverty alleviation have always been complemented with environment-friendly activities.

In 2017, ASHI included in its strategic plan a Strategic Goal 4 related to “Taking Care of the Environment”. Yet, while this strategic environmental goal has institutionalized environmental protection initiatives, the activities were not supported by any actual data (e.g., the number of clients without solid waste management practices). Engaging in Environmental Performance Management (EPM) was evidence for ASHI to translate their commitments to SG4 into reality.

2. K-Coop Case Study: Assess environmental risks and vulnerabilities.

Kabuhayan sa Ganap na Kasarinlan Credit & Savings Cooperative (K-Coop), aims to help improve the quality of life of its members in urban and peri-urban communities through authentic economic and social empowerment using microfinance as a strategy for its members to gain access to collateral-free credit for self-help activities.

K-Coop has mostly urban clients, who are engaged in home-based businesses such as retail stores, food vending, and junk shops. When Typhoon Ketsana hit Metro Manila and its neighboring provinces in 2009, over 2,000 clients and more than 20 employees lost their homes, businesses, and other properties. This prompted the institution to pursue disaster preparedness, response, and recovery as one of its core programs, and to offer a Housing Loan to clients.

K-Coop soon realized that disaster risk reduction would not be enough to truly address the adverse impacts of the growing threats of natural and man-made disasters on clients. As part of its 2022-2027 strategic plan, K-Coop identified the 6th program pillar: Environment, Resiliency, and Sustainability (ERS). With the support of TRIAS, a Belgian development organization, the program on ERS program began to take shape.

2. OnePuhunan Case Study: Develop an environmental action plan and data management strategy to strengthen their environmental performance management.

CreditAccess Philippines Financing Company Inc. - One Puhunan provides financial services in the Philippines focusing on low income individuals and small businesses which are not served by traditional banking institutions.

One Puhunan had its first foray into environmental stewardship with the adoption of Environmental Social Governance (ESG) framework in 2021. Guided by an external ESG expert, OnePuhunan went on to craft and implement its ESG strategy and policy founded on the commitment to responsible, sustainable, and inclusive finance. To track and manage its own ecological footprint, OnePuhunan had defined in its ESG framework a set of standard indicators on resource consumption covering electricity, water, gasoline, diesel, paper including flyers and sticker packs. Backed by infographics contained in an ESG Primer, everyone in the organization is made aware of the environmental stewardship commitment - targets and indicators, and the responsibility that falls on each employee.