Eksfin’s risk approach to sustainability is reflected in the frameworks that the agency has committed to.
Eksfin’s follows several international guidelines and initiatives as part of the strategic efforts to promote environmental and social conditions. As a provider of publicly funded export credits, Eksfin is required to follow the OECD Common Approaches for officially supported export credits and environmental and social due diligence. Find out more about the OECD Common Approaches and other international frameworks that Eksfin adheres to below.
Framework for due diligence in relation to the environment and social risks:
UN Guiding Principles on Business and Human Rights
The United Nations Guiding Principles for Business and Human Rights (UNGP) is the prevailing international standard for how businesses should relate to human rights. The principles were unanimously adopted by the UN Human Rights Council in 2011. They state that the business community has an independent responsibility to respect human rights. Companies should have a publicly available strategy or policy, conduct and follow-up on due diligence assessments in the supply chain, and help to ensure that those affected by the company’s activities are consulted, and have the opportunity to have their grievances considered.
Eksfin encourages all its customers and partners to familiarise themselves with the UN’s guiding principles for business and human rights and to adhere to these.
The UN Guidelines for Business and Human Rights (UNGP) can be read here.
OECD Guidelines for Multinational Enterprises (MNE)
The OECD Guidelines for Multinational Enterprises are recommendations from OECD countries’ governments for businesses with international operations, regardless of the company’s legal status, size, ownership, or sector.
The guidelines provide principles and standards for responsible business conduct in accordance with applicable laws and internationally recognised standards. They cover everything from the disclosure of information, human rights, employment, environmental protection, corruption, consumer interests, science and technology, to competition and taxation.
All OECD countries and other countries that voluntarily adhere to the guidelines are obliged under international law to establish a National Contact Point (NCP) to promote the guidelines, deal with questions and enquiries about them, and help to resolve complaints related to how companies comply with the guidelines. Where dialogue and mediation on breaches of the guidelines are not possible, the NCP shall publish a final statement on the complaint. These NCPs are the only internationally recognised appeal bodies of their kind. Pursuant to the OECD Common Approaches, which Eksfin is obliged to follow, statements and reports from the NCP must be taken into consideration in connection with applications for financing.
Eksfin encourages all its customers and partners to familiarise themselves with the OECD guidelines for multinational companies. The OECD’s national contact point can provide useful advice and guidance.
OECDs Common Approaches for officially support export credits and environmental and social due diligence (2016)
The OECD Common Approaches for officially supported export credits and environmental and social due diligence is often simply referred to as the OECD Common Approaches.
This is the primary framework for Eksfin’s assessment of environmental and social risks in transactions. These were launched in 2001 and have been updated several times since, most recently in 2016. The guidelines describe how environmental and social risks in the transactions are to be mapped and assessed.
The guidelines are based on internationally recognised conventions and recommendations from the UN and the World Bank concerning the protection of human rights, worker rights, the environment, and climate. The main idea is that competition should be based upon the export product’s quality and price, and not at the expense of assessments and requirements related to the environment and social conditions.
The OECD Common Approaches use the IFC Performance Standards and World Bank’s EHS guidelines as the framework for the assessments. The Common Approaches includes an annex with an indicative list of Catergory A projects that can be a useful reference.
The OECD Common Approaches can be read here.
Equator Principles (EP4)
The Equator Principles serve as the major international commercial banks’ framework for how environmental and social risks are to be assessed and dealt with in financing larger projects. The guidelines were launched in 2003 and last updated in 2020. (Equator Principles IV)
The guidelines are largely identical to the OECD Common Approaches and several export credit agencies are also members of the Equator Principles. In total, more than 110 international banks and financial institutions from more than 35 different countries are members of the Equator Principles.
Corresponding to the OECD Common Approaches, the Equator Principles use the IFC Performance Standards and World Bank’s HSE guidelines as the framework for the assessments.
IFC Performance Standards (2012)
The International Finance Corporation (IFC) is the part of the World Bank Group that finances private sector projects in developing countries. It has established a set of Performance Standards grouped into eight different categories of environmental and social risks. These are:
– Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts
– Performance Standard 2: Labour and Working Conditions
– Performance Standard 3: Resource Efficiency and Pollution Prevention
– Performance Standard 4: Community Health, Safety, and Security
– Performance Standard 5: Land Acquisition and Involuntary Resettlement
– Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
– Performance Standard 7: Indigenous Peoples
– Performance Standard 8: Cultural Heritage
The IFC Performance Standards have established themselves as internationally recognised norms and references. The Performance Standards provide guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way. Both the OECD Common Approaches and the Equator Principles use the IFC Performance Standards as a basis for assessing the environmental and social risks in the transactions.
You can find out more about the IFC Performance Standards here.
World Bank Environmental, Health and Safety (EHS) Guidelines
The World Bank Environmental, Health and Safety Guidelines specify technical criteria in respect of good international industry practice (GIIP) for the environment, health, and safety. The requirements are based on the ability to develop projects using available technology at a reasonable cost.
The general EHS guidelines are further underpinned with industry-specific guidelines.
You can find out more about the general and sector-specific EHS guidelines here.
OECD Council Recommendation on Bribery and Officially Supported Export Credits
The OECD has adopted an anti-bribery convention (1997). In addition, the OECD has prepared the OECD Recommendation of the Council on Bribery and Officially Supported Export Credits. These guidelines were last updated in March 2019.
The guidelines set requirements for how the risk of corruption is to be followed up in the assessments of transactions.
The OECD’s Recommendation of the Council on Bribery and Officially Supported Export Credits can be read here.
OECDs Recommendation on Sustainable Lending Practices and Officially Supported Exports Credits
The OECD Recommendation on Sustainable Lending Practices and Officially Supported Export Credits is a set of guidelines that Eksfin, as an ECA, follows in order to prevent developing countries from incurring an unsustainable level of debt.
Before offering financing to public buyers/publicly guaranteed buyers in low-income countries, Eksfin will examine whether financing is within the limits of the public borrowing agreed with the International Monetary Fund (IMF) and World Bank and that the borrowing is otherwise in line with the country’s long-term development plans.
The guidelines support the work of the IMF and World Bank in helping developing countries not to rebuild significant foreign debt once it has fallen to an acceptable level through the Heavily Indebted Poor Countries (HIPC) and Multilateral Debt Relief (MDRI) initiatives
The OECD’s Recommendation on Sustainable Lending Practices and Officially Supported Export Credits can be read here.
Other useful frameworks and principles developed by the OECD for lending to low-income countries can be found here.
UN Global Compact
The UN Global Compact is the UN’s organisation for sustainable business and the world’s largest corporate initiative for sustainability. More than 12,354 companies in 160 countries are members. There are UN Global Compact networks in around 70 countries around the world, including Norway, which has a network of more than 250 members. The UN Global Compact is based on ten principles that provide guidelines for how businesses must ensure responsible operations with respect to human rights, the labour market, anti-corruption, and the environment. The principles and the UN’s 17 sustainable development goals will run as a common thread throughout the work of the members of the UN Global Compact.
Poseidon Principles is an initiative and agreement among leading shipping banks on a method for measuring the greenhouse gas footprints of their shipping portfolios based on the data reported to the International Maritime Organization (IMO) by shipping companies. The status of the members’ shipping portfolios in relation to the development necessary to achieve the two-degree target is published each year. The initiative was developed by Citibank, Société Générale, and DNB in collaboration with leading stakeholders in shipping and climate research. To date, more than 25 leading shipping banks have joined the initiative, which was launched in 2019. French and Finnish export credit institutions are also members.
Poseidon Principles website.
Responsible Ship Recycling Standard (RSRS)
The Responsible Ship Recycling Standard (RSRS) aims to protect people and the environment when vessels are being scrapped. It is based on the International Maritime Organization’s (IMO) Hong Kong convention (adopted in 2009 but not yet in force) and EU regulations to ensure the proper recycling of ships and mobile offshore units. All vessels financed by RSRS members must have an Inventory of Hazardous Materials (IHM) of the ship’s equipment and structure. This supports the safety of both crew members during the ship’s operation and workers during the recycling process, while also being able to alleviate the negative impact on the environment. Shipping companies that receive financing further undertake to develop a general policy for the scrapping of their vessels no later than one year after financing is granted. The RSRS was established in 2017 by the Dutch banks ABN Amro, ING, and NIBC and currently has 11 members in addition to Eksfin..
The RSRS has its own page on LinkedIn with the guidelines and an overview of members. You can find out more here.