Portfolio trends 2023 versus 2019
1.
Treibhausgas (THG)-Emissionen zu vermeiden,
A Brazilian alloy manufacturer provides a good example of positive DERa performance, gaining points in the “Decent jobs” category and from considerable growth as a major employer in a rural region. DEG has been investing in the company since 2008 and has helped it to achieve a steadily increasing development performance. In particular, the company's environmental management has improved significantly in recent years and has been certified under several international standards.
However, not every development is consistently positive, as demonstrated by a DEG investment in a microfinance enterprise. It has built up a group of financial institutions in emerging market countries and offers financial products and services to micro- and small enterprises that are excluded from the traditional financial sector. This focus gives the company a very high level of developmental relevance and a good score in both the “Market and sector development” and “Decent jobs” categories. However, after years of strong growth, the group is now in a period of consolidation, which resulted in a lower DERa score in the “Local income” category.
Within the “Decent jobs” category, the average score increased from 17.4 to 19.3 DERa points between 2019 and 2023. The job count rose from around 1.6 million in 2019 to 2.2 million in 2023. DEG's fund investments made the largest contribution to this increase, with over 500,000 additional employees, attributable to new fund investments. The customers with the greatest increase in employees were in the transport and warehousing sector and the information and communications sector.
The average “Local income” score decreased slightly from 24.3 to 24 DERa points between 2019 and 2023, a deterioration of 0.3 DERa points. However, the scores initially declined dramatically, likely as a result of the Covid-19 pandemic, before recovering again. A total of 59% of customers improved or regained their score. The contribution to local income by enterprises, project financing and financial institutions increased from over EUR 40 billion to almost EUR 50 billion. The funds generated an additional EUR 46 billion in local income through their new investments. The largest average growth (based on three annual averages) was achieved by customers in the construction and manufacturing sectors, whereas agricultural customers experienced slower growth.
In the category of “Market and sector development”, the score remained relatively constant, as it relates mainly to the country and sector in which the customer operates and these factors do not change over time.
“Environmental stewardship” recorded a slight increase. The average customer score increased from 14.9 to 15.5 DERa points between 2019 and 2023, with 89% maintaining or improving their score. DEG is working particularly hard with customers in this area to improve their environmental and social management, with a significant improvement noted for customers in the manufacturing and hospitality sectors. The quality of environmental management remains high among agricultural customers and the funds in the DEG portfolio. The majority of projects that helped to avoid and reduce environmental damage had embedded these components in the project design, for example by using renewable energy sources. There were therefore no changes during the course of the project.
Customers also show a positive trend in the “Community benefits” category, with a score of 4.6 DERa points in 2019 and 5.2 in 2023. The total contributions to community development increased from around EUR 183 million to about EUR 230 million. Overall, 71% of customers maintained or improved their score. These were predominantly financial institutions DEG financed, which increased their spending by an average of over 7%.