Development Of Environmental And Social Management System (ESMS) For Credit Analysis
Banks and other financial institurions manage their exposure to environmental and social risks by establishing an Environmental and Social Management System (ESMS). The Environmental and Social Risk Management System of Escarus involves a methodological approach to manage environmental and social risks and impacts in a structured way.
Escarus was asked to establish a bank wide system which should be fully incorporated into the credit, project finance, investment banking, briefly all credit related risk policies and procedures. In the project Escarus established an Environmental and Social Management System (ESMS) for the publicly owned Development & Investment Bank of Turkey.
Escarus ESMS system was aligned with the client’s risk appetite that shows the type and level of risk that the bank is willing to take in pursuit of its strategic and business objectives. Escarus integrated the E&S risk framework into Bank’s lending activities within the project. After the integration, the Bank was able to identify and evaluate potential environmental and social risks associated with its lending process and identify the correct measures to mitigate and manage risks. Furthermore, Escarus set up its Environmental and Social Risk Evaluation Tool (ERET) into the Bank’s credit evaluation processes to enable the Bank be in line with the IFI’s E&S requirements.
Environmental and Social Risk Management System is a living system. Escarus regularly assess the system of its clients to determine if they are adequately managing environmental and social risks in their daily operations in light of emerging and evolving environmental & social issues.
Integrated E&S Risk Management System For The Major Glass Manufacturer In Turkey
An Environmental and Social Management System is a set of policies, procedures, tookit and internal capacity to identify and manage an institution's exposure to the environmental and social risk. The client has operations that are highly dependent on access to natural resources often face a high level of environmental risk. Furthermore, the operations pose significant health and safety hazards to workers and have significant socio-economic impacts on local communities.
Escarus established an Environmental and Social Management System (ESMS) for the client and its’ 5 subsidiaries. Through the system an E&S framework was integrated into the clients’ manufacturing processes. It is driven by an overall strategy and policy commitments and has a clear governance framework. The system is supported by management information tools and the client is now using the technology & analytics to meet its sustainability objectives.
At the end of the project, the client was able make a centralized data collection and manage sustainability KPIs with an integrated perspective. The client and its subsidiaries are now effectively manage E&S issues in their businesses that may lead to a range of financial, legal and reputational consequences for their group.
Global Energy Company Of Azerbaijan - Sustainability Management System
The aim of the project was to help the client to understand its business impact on people, social life and environment, and to implement strategies to transform those impacts into positive ones. The client was initiated a Sustainability Management System project to ensure that all its activities are in compliance with the principles of sustainability, and to shape its corporate governance structure in accordance with these principles. Escarus developed sustainability strategy and policies for the client to make a new business model for its sustainability issues.
Escarus also put down the procedures and developed necessary documentation for that new business model, and consequently defined roles and responsibilities concerning procedures. In the project, Escarus established a centralized data collection and sustainable management system with an integrated perspective. Additionally, training programs were developed for both enhancing awareness among employees about sustainability and improving the capacities of departments. SDG mapping analysis and sustainability reporting were the last phases of the project also held by Escarus.
Briefly, Escarus created an integrated system which ensures consolidation of sustainability related activities of the client and its subsidiaries.
Islamic Development Bank - Value Chain Based Country Diagnostic Study for Turkey
The Bank’s new business model is based on the objective of strengthening the competitiveness of member countries in strategic industries to become comparatively advantageous in creating and integrating with value chains. A new development model emphasizing value chain based approach was piloted in Turkey by Escarus.
Throughout the project Escarus tried to find out how Turkey can integrate into global GVCs and adapt to change by global circumstances through investments in key sectors. To understand the formation of GVCs in details, Escarus undertook a comprehensive analysis of the Turkish industry by relying on a huge data set. Since the agreement requires the development of a prioritization methodology based on several criteria by considering natural, dynamic, surplus and spillover potential, several data sources were scrutinized, and analyses were conducted so as to attain internal consistency.
The following indicators capturing various industrial characteristics were estimated/calculated at the firm level to analyze industries with NACE 4-digit classification: TFP growth rate, TFP differences between large and small-sized firms, returns to scale, the share of foreign firms, the share of exporters, number of firms, firm size, relative wages, labour productivity, and capital intensity. The following indicators were used for the industries with NAICS classification: product complexity, revealed comparative advantage, the share in world import, export and concentration, export value, import value, trade balance, and global demand projections.
At the last stage, Escarus team developed five reports in a way to cover both preliminary GVC analysis and the initial mapping of the value chains in the selected sectors.
UNDP Project - Development Of Strategic Investment Plans
The main objectives of the project was to;
- Increase agricultural production and productivity and its competitivity,
- Improve local infrastructures and services for markets and marketing,
- Use land, earth, water and fauna resources in a sustainable way,
- Strengthen local agricultural institutions,
- Develop investment model based on analytical work and findings,
- Engage in creating a favorable environment for the private sector to invest in production, processing and marketing through infrastructures & incentives.
During the project Escarus;
- Analyzed the value chains of strawberry, cherry, grape, mushroom and medicinal aromatic plants within the borders of Konya and Karaman province,
- Undertook a comprehensive analysis on the private sector involved in the production of these products,
- Identified challenges faced by farmers and elaborated on the farmers’ organizations in the region,
- Created strategic investment plans for each product in the value chain, including post-harvest food safety, storage, drying, rating / separation, packaging, certification, labeling, branding, etc.,
- Evaluated several investment project proposals from a financial perspective.
Turkey Ministry of Development - Sustainable Development Goals (SDG) Project
Escarus was the lead and only consultant in the project that supports Ministry of Devlopment (MoD) on SDGs implementation and monitoring based on the findings regarding the current situation and gaps considering Agenda 2030 and its Sustainable Development Goals that would be prioritized in the next (11th) National Development Plan.
Escarus developed SDGs reports which summarize the current situation and gaps based on previous development plans, priorities, needs, and resources availability. During the project Escarus;
- Reflected on national targets and indicators around prioritized local SDGs targets and indicators.
- Provided detailed technical advice on SDGs,
- Support the public authorities in consultations on SDGs,
- Technical reviewing considering the action plan and facts that took place in all SDG reports.
In the project Escarus outlined the current situation of Turkey in terms of;
- Policies and strategies,
- Relevant legislation,
- Institutional framework.
Escarus conducted many qualitative and quantitative analysis considering;
- Document and inventory surveys based on desktop review,
- Roundtable meetings, one-to-one interviews, stakeholder questionnaires,
- Review of legal framework in line with SDGs,
- SDG interlinkages.
Project outputs provided input for the 11th Development Plan of Turkey.
MENA Region - Development Bank- Strategic Advisory Project
- Development Bank in MENA Region launched an integrated consultancy program to provide different types of advisory services to small and medium-sized enterprises (SMEs), which are indispensable for national economies due to their role in economic recovery, structural change, employment creation and adaptation.
Escarus provided restructuring advisory services relevant to two phases:
- Developing Execution Plan (set of corrective actions along with the implementation framework),
- Implementing Execution Plan.
Escarus provided guidance to SMEs in;
- Optimizing sales efficiency and costs,
- Maximizing business profitability by providing the necessary support to diagnose adverse causes and implement an effective turnaround.
Green/Sustainable Bond Consultancy
- Escarus provided an advisory services to one of the top local construction company for the first Green/Sustainable Bond Issuance in Turkey in December 2017.
- Escarus prepared a second party opinion report on the company’s Green Bond Framework in reference with Green Bond Principles.
- Annual Impact Reports were also submitted by Escarus. Drawing on green/sustainable bond expertise and experience, Escarus provided second party opinion and monitoring services as per the requirements of the Green Bond Principles (established by the International Capital Market Association).
- During the consultancy period, the client was able to ensure it’s green bond processes, controls and procedures were credible and reliable.
Technical, Environmental And Social Due Diligence And Monitoring
Escarus provided lender’s side consultancy services for many of the most respected international financial institutions, including development finance banks, Exim banks, most of the international banks as well as many local banks in Turkey and abroad.
During the last 3 years Escarus provided Lender’s Engineering services to a local Exim bank for their lending in Africa. Within the project, Escarus made a detailed analysis of exported goods and services from a value-added perspective.
In addition to analysis process, Escarus provided an assessment of environmental and social risks according to IFC’s Performance Standards. Moreover, Escarus evaluated the public participation meeting notes and examined the public disclosure and feedback from the public.
Escarus also conducted site monitoring on technical progress and environmental and social applications.
Briefly Escarus services cover the lender’s advisory services, such as:
- Technical due diligence services,
- Environmental and social due diligence services,
- Professional advice on technical, cost and contractual issues,
- Monitoring of technical, environmental and social issues.
STWI (Swedish Textile Water Institute) Project - Textile, Energy And Resource Efficiency Project
Sweden Textile Water Initiative (STWI) is a private sector network with a membership of some 30 predominately Swedish textile and leather companies. STWI projects were implemented with the aim of improving water efficiency in production processes for suppliers and sub-suppliers to STWI member Brands in production hubs in Bangladesh, China, India, Ethiopia and Turkey.
The program was structured in four components:
- Capacity building and investment support in textile factories;
- Improving industrial water governance in production countries;
- Harmonization of the STWI guidelines on resource use for the textile sector and influence of international processes; and
- Communication and outreach.
SIWI implemented the program and SIDA (Swedish International Development Cooperation Agency) provided almost all financial funding amounting to 49 million SEK as a Public Private Development Project.
Consultancy services for Turkey was provided by Escarus between the years 2015-2017.
During the project Escarus focused on improving environmental performance capacity of suppliers on sustainable use of water, energy and chemicals in textile and leather production processes by
- Reusing waste and by-products in production,
- Reducing pollution,
- İncreasing management and employee information capacities for wastewater treatment.
Scoping Study - EBRD Project - Energy Audits In Public Buildings
The main aim of the project was to conduct a feasibility study within the framework of EBRD’s investment program for increasing energy efficiency and the seismic resistance of the existing education buildings of the Turkey Ministry of National Education (MoNE).
Project tasks was conducted under 4 components
- Energy audits and seismic resilience surveys in selected schools (pilot study)
- Investment proposals and financial analyses
- Projection of results from pilot studies throughout the building stock of MoNE
- Economical analysis of investment programme by calculating financial and non-financial benefits
Energy audits and seismic resilience surveys were carried out by Escarus in 8 school buildings specifically selected to represent the MoNE’s building portfolio. Energy efficiency measures and structural retrofitting schemes were proposed considering the energy performances and deficiencies of the audited buildings.
Potential investment opportunities were proposed for MoNE’s building stock that might be covered under EBRD’s investment program using the findings of the field studies.
Both financial and non-financial potential benefits coming from energy efficiency and seismic retrofitting investments were also assessed, in terms of energy savings, CO2 emission savings, better student/teacher comfort, improved health conditions, protection from injury against any possible earthquake.
Iron & Steel Company - Operational And Resource Efficiency Project
- Energy efficiency improvement is an important way to reduce costs and to increase predictable earnings, especially in times of high economic volatility. There are a variety of opportunities available at individual plants in iron and steel industry to reduce energy consumption in a cost effective manner.
- The project can be summarized as an operational and resource efficiency project for a pioneer Turkish iron and steel company producing steel for mining, shipbuilding, railway and automotive industries.
- Escarus helped the client to identify resource efficiency opportunities, turn them into economically viable projects and develop long-term investment program.
- During the project, Escarus also prepared technical and economic feasibility studies. Working closely with the client’s technical staff Escarus consultants defined priority energy and resource efficiency investments within the company. Escarus focused on modernizing manufacturing operations, creating capacity for energy efficiency and offered alternative ways to use process heat.
KOTON Gender Equality In Supply Chain Project
- Escarus cooperated with French Development Agency (AFD) and Industrial Development Bank of Turkey (TSKB) for the project.
- The main aim of the project was to promote gender equality practices throughout the supply chain of Koton (Turkish fast-moving clothing brand) and evaluation of suppliers and certification for their gender equality efforts.
- The study also aimed to improve data collection and achieve the workplace gender equality. Escarus guided the companies in Koton’s supply chain to a point where people are able to access the same resources and opportunities regardless of gender.
- At the end of the project, the companies in the supply chain understood how to remove the barriers for the full and equal participation of women employees in the workforce. Due to their overall gender equality score, Escarus provided them a globally valid certification.