EIFO’s approach to ESG

Showing consideration to social and environmental conditions is a foundational term when EIFO aids Danish companies out into the world. EIFO must follow certain international agreements in the ESG-area, but considerations regarding ESG also creates value for businesses. When ESG considerations are in place, it can, among other things, make the running of your project more flexible.

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We work towards sustainable development of society

The aim of Denmark’s Export and Investment Fund (EIFO) is, among others, to “contribute to a sustainable and green transition”. As an organization and financing partner, we are committed to making a positive contribution to a sustainable development of the society.

Environmental and climate sustainability are therefore a deeply embedded part of EIFO. Our ambition is to provide a significant contribution to the reduction of, among others, CO2 emission, nationally as well as internationally through our business transactions. EIFO’s activities are conducted with due respect for the UN’s guiding principles for Business and Human Rights (including the ILO conventions on labour standards) and relevant OECD-guidelines.

Photo: Bicycles in Copenhagen, Credit: Shutterstock

Showing consideration to the world around us is part of our core values and financing approach which explains our dedication to sustainability and a responsible business conduct in connection with our financings. EIFO takes a risk-based approach to ESG founded on a principle of proportionality. This means that EIFO pays attention to those areas with the highest impact on the society or on EIFO’s business and where the invested resources will create the most significant changes.

Our approach to ESG varies across business areas, depending on the financial product, the size of the transaction and the assessed risk of negative impact on ESG factors.

ESG assessments

Read about the process for ESG assessments of loan financing and equity investment, as well as of fund investments.

ESG assessment of fund investments

EIFO conducts an in-depth ESG assessment of all our fund investments in close cooperation with our ESG specialists. The questions related to ILPA Due Diligence Questionnaire 2.0 regarding ESG as well as EIFO’s policies in this area form the framework of the assessment.

The fund’s policies regarding ESG and sustainability as well as the implementation hereof will be assessed together with the fund managers’ approach and level of maturity within this area. An overall assessment will be conducted with due consideration of the geographic and sector focus of the fund.

It is crucial that the fund is either committed to or is willing to commit to invest with due respect for the United Nation’s universal human rights including the International Labour Organization’s (ILO) basic labour standards, the environment (including climate and biodiversity) and good business ethics.

The ESG assessment forms part of the final decision regarding the investment. If risks are identified in connection with the ESG due diligence process, suggestions for mitigation will be incorporated in the legal agreement with the fund.

ESG assessment of loan financing and equity investment

Our risk-based approach is reflected in the way we process ESG assessment of new financing. All new transactions go through an initial screening which determines the extent of the ESG assessment. It decides whether an extended ESG assessment is required from our independent ESG experts. The depth of the ESG assessment depends on the size of the transaction and whether the financing is handled by EIFO directly or through one of our business partners such as banks, credit institutions or private investors. It also depends on the criteria related to the sector or the activity. When assessing the individual company’s environmental and social impact, we look at the following parameters: environment, social and governance issues as well as responsibility in relation to tax and screening of co-owners and co-investors.

Tax

It is crucial to EIFO that our business partners pay the tax to which they are liable. EIFO has zero tolerance for tax evasion and does not support aggressive tax planning. EIFO supports a greater extent of openness and dialogue on approach to tax, including relevant international tax initiatives implemented by the EU and the OECD. We do not provide financing to countries on EU’s list of tax evasion.

Therefore, EIFO has also endorsed the Tax Code of Conduct, an official declaration by major Danish financial investors, including ATP and Novo Holdings, to support the prevention of aggressive tax planning.

Whistleblower scheme and right of complaint

EIFO wants to be a trustworthy company with an open company culture in which everyone can make their observations known, if they experience illegal activities, serious irregularities or have legitimate suspicions regarding these matters.

ESG approach

Read more about our approach to ESG via the following links:

The Export and Investment Fund of Denmark's Environmental, Social and Governance Policy (in Danish)