Environmental performance management to improve people's resilience to climate change
Insight from the Philippines
Cerise+SPTF, in collaboration with ADA (Aide au développement autonome) and the Microfinance Council of the Philippines (MCPI), produced a paper to explore the correlations between Environmental Performance Management (EPM) practices and the improvement of the resilience of vulnerable population to climate change. Through this paper, based on a research study carried out in the Philippines (Soulet, 2023), we investigated whether, as part of their social and environmental strategy, financial service providers (FSPs) can directly mitigate the negative consequences of climate change for their customers.
Methodology
Based on the framework of Dimension 7 on Environmental Performance Management, a case study on the Green Inclusive Finance Project was carried out in the Philippines as part of a research thesis under the European Microfinance Program at the Free University of Brussels. This research was analyzed in terms of key challenges and value for EPM in inclusive finance. It took place in the Philippines from May to September 2023, with 51 individual semi-directive interviews (33 farmers, 10 FSPs staff, 8 partners).
The analysis was conducted based on the results of two FSPs that have developed a test lending program with two types of green loans. Non-financial services have been provided to 35 farmers to enhance their knowledge of the impact of climate change and smart technologies through training and visits to sustainable farms. Eight demonstration farms are currently being developed under the guidance of organic farming experts.
Thus, we have decided to test 3 hypotheses with this concrete case study to analyze whether these postulates are correct:
- FSPs need a clear environmental strategy to implement efficient EPM (test with standard 7A);
- FSPs need to understand the risks at the client level to provide adapted response for them to tackle environmental vulnerability (test with standard 7B);
- FSPs need to provide adapted financial and non-financial services to ensure the efficiency of their environmental strategy (test with standard 7C).
Results
This article, through the GIF project, is proof that financial service providers can develop financial and non-financial products adapted to farmers to enable them to be more resilient in the face of climate change. Based on the analysis of Dimension 7 practices and the project results, we can draw the following conclusions:
- Having a clear environmental strategy seems to be an important management factor, but being alert to opportunities and developing an environmental strategy alongside a concrete project also seems to work;
- Measuring and collecting data on specific climate risks and customer vulnerability is essential for creating tailor-made products to meet customer needs, adapting innovative sustainable agriculture solutions, creating tangible evidence and developing products to be offered on a larger scale;
- Converting market and risk analyses into suitable financial products is an important first step in enabling customers to develop a responsible agricultural project. But the addition of non-financial products and services is essential for implementing effective EPM, managing change, convincing farmers to test new ways of producing and demonstrating the positive effects;
- Working with specialized partners to develop non-financial services is a key element in the successful application of environmental performance for an FSP. Local partners also play a powerful role as role models and as a source of replication for rural farmer customers.
To find out more about this research, download the article in the language of your choice:
Join thousands of users on SPI Online
Powerful evaluation tools to turn intentions into impact.
