The Environmental and Social Management System of KCGF

What is ESMS?

The Environmental and Social Management System is the continuous cycle of planning, application, review and action activities that an institution undertakes to fulfill its environmental obligations. In accordance with our institutional efforts to contribute to economic development with full responsibility for the environment and society, KCGF has designed and is currently implementing the Environmental and Social Management System (ESMS).

When it comes to environmental benefits, KCGF is trying to ensure that guaranteed loans are subject to environmental screening and due diligence. To achieve this goal, KCGF jointly with the World Bank Group have designed ESMS for banks that did not have before. The ESME will help Banks identify and assess environmental and social impacts prior to the project initiation phase. By implementing these steps, Banks will monitor and mitigate adverse environmental impacts of financed projects.

What are the main components of ESMS?

Environmental and social policy

The environmental and social policy presents the vision and mission of KCGF in relation to the environment, society and contributions to sustainable development. KCGF recognizes the importance of environmental and social risk management. In this regard, KCGF is committed to identifying and addressing all environmental and social risks related to its guarantee activities. The policy describes the guiding principles and rules that should be part of the best practice of environmental and social risk management of the guarantee where KCGF bears most of the risk.

Environmental categorization

KCGF analyzes the investment plan of SMEs for environmental and social categorization of the guarantee. Based on the investment plan, the environmental and social impact is assessed. KCGF monitors guarantees classified with medium and high impacts, as well as instructs that protective measures be taken to reduce the environmental and social impact. Within the framework of the environmental and social policy, we are based on the list of restricted and prohibited sectors, which have been determined by donors and partners.

Training of IRFs

Up to date,  1500 officials of Registered Financial Institutions have been trained.

What has been done about ESMS?

  • Full implementation of the Environmental and Social Policy
  • Preparation of guidelines for environmental and social categorization
  • Training for IRFs