The EDFI Environmental & Social (E&S) and Development Working Group meetings in early November brought together experts and leaders from across the development finance sector for a two-day meeting to foster meaningful conversations around environmental and sustainable standards in development finance. With more than 100 participants from various Development Finance Institutions (DFIs), the gathering highlighted the importance of collaboration and harmonisation of practices.

Day One: Bridging E&S and Development

Hosted by the Belgian Investment Company for Developing Countries (BIO) at the Royal Museum for Central Africa in Tervuren, Belgium, the first day of the event focussed on bridging E&S and Development topics, with both groups present at the Africa Museum. The meetings began with a welcoming address and a quick tour de table by BIO Development & Sustainability (DNS) leadership.

A host of topics were explored throughout the day, especially Bridge Topics Management for areas such as gender and climate. Both are increasingly assessed using clear frameworks, presenting opportunities and challenges for integration within impact and E&S assessments. Separately, a talk on Green Transition Integration was shepherded by EDFI and the European Commission’s Directorate-General for International Partnerships, or DG INTPA, on integrating the green transition into development finance strategies.

Engaging with NGOs and stakeholders was explored at length during a breakout session, especially around best practices and effective communication strategies. Another crucial topic was data management and harmonisation, notably the integration and harmonisation of data, particularly focussing on client reporting practices. The event also addressed challenges in co-investment scenarios, exploring communication between DFIs and information sharing in syndicated deals.

Day 2: Focus on reducing inequalities

The second day tackled development topics, with a particular emphasis on inclusivity and the collective effort towards achieving UN Sustainable Development Goal 10 – reducing inequalities. Day 2 morning sessions explored inclusive business practices from various angles, including harmonisation of practices and specific approaches for investing in fragile contexts and Least Developed Countries (LDCs). A key focus was on additionality, with experts from BIO sharing results from their recent evaluation on non-financial additionality. Representatives from Norfund, OECD, Danish DFI IFU, and FMO presented their approaches to assessing and demonstrating additionality.

The afternoon featured breakout sessions on topics identified as crucial by participants in previous feedback surveys. They centred on areas such as lessons learning, negative impact assessment, and Joint Impact Model (JIM) for estimating indirect investment impacts.

Red-thread topic: Equality and SDG 10

Throughout the event, discussions frequently returned to the theme of equality, addressing SDG 10. Participants examined various dimensions of inclusivity, going beyond gender to consider other marginalised groups such as disabled people, migrants, and low-skilled rural workers. Several frameworks were discussed in relation to inclusivity, such as GDIF, the Gender Diversity and Inclusion Framework; the 2X Challenge on gender; and British DFI BII’s ‘BOLD’ approach –Black Ownership and Leadership Dimensions.

Working Groups: The Engine of Progress

A significant outcome of this networking event was the formation and continuation of various working groups. Typically comprising 10 to 15 people from different DFIs, these groups focus on specific topics and drive progress during the time period between the annual gatherings. Some notable working groups cover inclusive business, attribution, climate, decent work, as well as GHG Emissions. These groups allow for more in-depth exploration of topics and often lead to tangible outcomes, such as the harmonisation of client reporting templates and the creation of a catalogue of agreed-upon indicators.

The Importance of Networking Events

EDFI networking events like this matter because it gives practitioners in the DFI sphere a forum to share practices, their approaches, and to learn from one another. The gatherings also help bridge gaps, as smaller-sized DFIs stay connected with larger ones, ensuring a diverse range of perspectives and practices are shared. While together, participants can discuss difficult projects and share how they addressed various challenges, leading to improved practices across the sector. The networking formats provide an early detection system to identify trends, which helps DFIs prepare for future reporting requirements and strategic shifts. Throughout the meetings experts form personal connections, which can prove beneficial during collaborative projects or syndicated investments.

Impact Finance: A common goal

The event brought together professionals who share a common goal in impact finance. This shared mission creates an inspiring atmosphere among participants. Impact finance, as discussed at the event, goes beyond sustainable or responsible finance. It aims to: (i) Do No Harm (E&S focus);  (ii) Do Good (positive impact through client activities), and (iii) Do More (transformative role of DFIs). This “do more” aspect involves improving management systems, enhancing inclusivity approaches, and upgrading working conditions beyond compliance standards

“It’s about taking an investee by the hand and walking with them towards a more sustainable world,” said one event attendee.

Challenges: Enhance Biodiversity Conservation, Balancing Compliance and Impact

While the event highlighted the pluses of collaboration in development finance, it also revealed ongoing challenges. Take biodiversity expertise. There is a growing need for E&S teams to enhance their expertise in biodiversity conservation. Balancing compliance and impact by E&S teams poses another challenge. Those teams must navigate the dual responsibilities of ensuring regulatory compliance and driving positive impact. Resource allocation presents another issue, as smaller DFIs often struggle to participate in all working groups due to limited resources. As focus shifts from topics like digitalisation to inclusivity, climate, and biodiversity, DFIs must adapt their strategies and reporting mechanisms.

A Step Forward for Sustainable Finance

The EDFI E&S & Development Networking Event was another step forward in the collaborative efforts of Development Finance Institutions. By bringing together experts from various DFIs, the event fostered knowledge sharing, encouraged harmonisation of practices, and sparked discussions on crucial topics in sustainable finance.

As the development finance sector continues to evolve, events like these play a vital role in shaping strategies, aligning practices, and driving progress towards the Sustainable Development Goals. The emphasis on inclusivity, climate action, and transformative impact demonstrates the sector’s commitment to not just financing development, but actively shaping a more sustainable and equitable future.

The formation of working groups and the ongoing collaborations between DFIs promise continued progress in the field. Participants often leave refueled, going back to their DFIs with more questions than they arrived with – a sign of deepening understanding and a commitment to continuous improvement in the complex world of development finance.

As the sector moves forward, the lessons learned and connections made at this event will influence the strategies and practices of DFIs across Europe and beyond, contributing to a more sustainable and inclusive approach to development finance.

The next EDFI E&S & Development Networking Event is scheduled to be in Spain in 2025.