Developing World Markets (DWM), a U.S.-based impact investing fund manager with more than two decades of experience, has examined how capital providers to low-income and underserved communities can accelerate their response to climate change, both in terms of managing the risks and financing a more inclusive and equitable transition, in an effort to drive meaningful progress on climate action in financial inclusion.
The Climate Opportunity and Risk Assessment Ledger (CORAL), a self-assessment tool developed by DWM in collaboration with MicroSave Consulting, a global consulting firm active in financial, social, and economic inclusion, enables financial institutions to assess how well they have incorporated climate risks into their operations and to identify opportunities to reduce emissions and improve clients’ adaptive capacity. After that, DWM evaluated its own private equity portfolio companies with the technology in an effort to uncover insights that might be used across the inclusive finance industry.
DWM’s Director of Impact, Hannah Schiff, said “Access to finance for mitigation, adaptation, and resilience is critical to ensuring an equitable transition to an inclusive, green global economy, but the inclusive finance sector needs stronger and more relevant tools to help achieve this.”
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“This report shows how financial institutions can integrate a climate risk and opportunity lens into their day-to-day practices. We’re leveraging these findings to enhance climate action within our own portfolio right away,” she added.
Aleem Remtula, DWM Partner and Co-Head of Private Equity, said “Financial inclusion is the largest impact sector in emerging markets and local financial institutions are suited to drive substantial private capital to address the climate finance gap,” adding that Financial institutions are uniquely positioned to scale low-carbon pathways and build adaptive capacity for vulnerable clients but require better integration of climate risk considerations in the evaluation of customers and the appropriate tools and taxonomies to measure client-level impact.
Remtula said “DWM is grateful to MicroSave Consulting for its partnership in executing this research and shaping this report,” adding that “The report’s findings and practical recommendations would not have been possible without MSC’s sector expertise and nuanced insight.”
Story was adapted from Business Wire
