ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) and IMPACT POLICY

The Environmental, Social & Governance (ESG) and Impact Policy outlines FSD Africa's framework for integrating sustainability, social responsibility, and impact considerations into its grant funding and investment activities. The policy establishes a systems approach via an Environmental and Social Performance Management (ESPM) system to avoid harm, protect value, and drive positive development outcomes in sub-Saharan Africa.

• FSD Africa implements a systems approach to ES&I management through an Environmental and Social Performance Management (ESPM) system. This system integrates ES&I criteria into all grant and investment activities, utilizing tools such as exclusion and screening criteria, risk assessments, due diligence, E&S action plans, and legal contracting clauses.
• The organization maintains a strict Exclusion List to ensure prohibited activities are not financed. This list prohibits funding for illegal activities, forced or child labour, weapons, radioactive materials, and specific environmental harms. It also includes a comprehensive ban on most fossil fuel activities, including coal prospection, oil exploration, crude oil pipelines, and the construction of new coal-fired power plants.
• FSD Africa applies a 'gender intentional lens' to its operations and funding to promote the economic advancement of women. This is operationalized through a Gender Lens Investing Framework for the Investments Pillar and Gender Inclusive Frameworks for non-financial interventions, aiming to build a pipeline of women-led investments and ensure operations do no harm to women.
• The policy defines 'Impact' as a strategic focus on solving societal challenges and strengthening financial markets. FSD Africa distinguishes between 'Value protection' (minimizing financial, operational, or reputational liability) and 'Value creation' (generating additional returns and positive development impact beyond normal achievements).
• FSD Africa aligns its ES&I approach with various international standards. For E&S risk, it references IFC Performance Standards, OECD Guidelines on Multinational Enterprises, and the UN Guiding Principles on Business and Human Rights. For impact and gender, it is guided by the Operating Principles for Impact Management, the 2X Challenge, and the Sustainable Development Goals.
• The organization commits to contributing to a 'Just Transition' and managing climate-related risks. This includes adopting climate action by addressing physical and transition risk management to reduce the contribution of FSD Africa and its partners to climate change effects.

APA

FSD Africa (n.d.). ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) and IMPACT POLICY. https://fsdafrica.org/wp-content/uploads/2025/05/ESG-and-Impact-Policy.pdf

Chicago

FSD Africa. ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) and IMPACT POLICY. n.d. https://fsdafrica.org/wp-content/uploads/2025/05/ESG-and-Impact-Policy.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) and IMPACT POLICY |url=https://fsdafrica.org/wp-content/uploads/2025/05/ESG-and-Impact-Policy.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafricandenvironmental, author = {{FSD Africa}}, title = {{ENVIRONMENTAL, SOCIAL \& GOVERNANCE (ESG) and IMPACT POLICY}}, institution = {FSD Africa}, url = {https://fsdafrica.org/wp-content/uploads/2025/05/ESG-and-Impact-Policy.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }