28 April 2023

ESG-process for category A and B export transactions

Read here and learn how ESG forms part of EIFO’ s assessment of export transactions involving medium to high risk.

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ESG considerations create value for Danish exports

For EIFO, showing considerations for the environment and social conditions is a fundamental requirement when we help Danish companies step into the world. EIFO is obliged to follow a number of international agreements related to Environmental, Social, and Governance (ESG), however, ESG also helps to create value for the companies. Once ESG is in place, it can make your project run more smoothly. See how ESG is incorporated into EIFO’s assessment of export transactions.

EIFO adheres to OECD's Common Approaches where export projects are classified as A, B and C-projects, based on their environmental and social impact. Below is a description of our ESG process covering A and B-projects which are projects with the potentially highest environmental and social impact.

Our initial ESG screening

First of all, we need to form an overview of your export transaction and classify it in order to decide what should be included in the ESG assessment. We do this based on your application for financing and possible additional information.

For export transactions that are low risk and amounting to less than DKK 25 million, a declaration and a limited amount of documentation will suffice. Transactions with higher risks as well as transactions worth more than DKK 25 million will require a more in-depth ESG assessment and subsequent monitoring.

Feel free to consult EIFO already during your design or project planning phase as this may facilitate the ESG process.

We gather documentation

During the next phase, we will gather documentation about your export project and its environmental and social impact. During this due diligence phase, you can contribute with documents about the project, i.e. building permits, environmental permits, environmental and social impact assessments, and project descriptions.

In some cases, we will also want to visit your project site to gain an idea of the actual conditions at the site. Some of the documents must be prepared by consultants, who must, however, be approved by EIFO.

We recommend and make a decision

Based on our research, we will prepare and submit a separate recommendation for EIFO’S management explaining your project's expected environmental and social impact. EIFO’s management will have the final say regarding the approval of the financing.

If EIFO’s management approves the project, EIFO will enter into a loan agreement with your company or your bank for the financing of the project.

We follow your project

EIFO prepares an ESG action plan as part of the agreement. This means that EIFO will follow your project and monitor the environmental and social impact of the project during the entire project period (as long as EIFO is financially involved).

Just like during the due diligence phase, monitoring may involve site visits and requirements for documentation in the form of environmental reports etc. EIFO will be your partner, helping you to comply with the ESG requirements. Depending on the ESG risk level and the capacity of the project owner the monitoring may require the assistance of an independent ESG monitoring consultant.