Statement on Corporate Social Responsibility
EIF - July 2005
1. CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) describes the voluntary obligations by which
enterprises respond to core concerns of the legal, social, economic, ecological and
ethical environments in which they act. The obligations associated with CSR are
additional to and extend beyond common regulatory and conventional requirements.
CSR also describes the means by which enterprises respond to core concerns of the
legal, social, economic, ecological and ethical environment in which enterprises act
and how such concerns are integrated in their business operations and in their
interaction with their stakeholders1.
CSR represents a comprehensive concept, which includes both issues related to
the structure of enterprises and
their operational behaviour
and has therefore an internal and an external dimension2.
In this context, it also addresses the relationship with all stakeholders, including
shareholders and employees.
CSR emphasises the importance of achieving a balance between economic growth,
social well-being and the protection of the environment in order to support of the
goal of sustainable development through competitiveness, the productive use of
resources and good governance (including anti-fraud and anti-corruption measures).
It involves the financial and business sectors, governments, employees and civil
society working together for “our common future”.
2. HIGH LEVEL POLICY
EIF has adopted the core principles of Corporate Social Responsibility (CSR) as an
important element of its strategy, objectives and policies, in line with EIB Group, of
which it is a member. EIF upholds CSR as sound business practice and therefore
aims at integrating the concerns linked to CSR into its business activities. This
includes giving recognition to the rights, interests and responsibilities of shareholders
and other stakeholders in order to achieve sustainable outcomes.
EIF actively contributes to the efforts of the European Union to enhance CSR. It is
also committed to contributing to the enhancement of international good practices.
In conducting its business, EIF stresses good governance, including a high level of
transparency and accountability for itself and its counterparts, whilst recognising the
need to respect confidentiality where appropriate and ensuring trust.
See also Green Paper of the European Commission of July 2001 COM (2001) 366 final, p.8.
Green Paper above, chapters 2.1 and 2.2.
EIF recognises the role that financial institutions can play to promote more ethical,
sustainable and environmentally friendly investments through their activities.
The European Community has repeatedly supported CSR, underlining that it is an
essential part of the Lisbon Agenda.
3. EIF MISSION AND INSTRUMENTS
EIF is a public-private partnership between European Investment Bank (EIB), the
European Community and major private financial institutions of the EU Member
States. Its mission is to pursue Community objectives, in particular through the
promotion of the access to finance for small and medium sized enterprises (“SMEs”)
throughout the European Union and the Accession Countries.
4. CSR - INTERNAL DIMENSION
a. Good Corporate Governance
EIF considers CSR as integral to good corporate governance. A corporate
governance statement was published in 2005, comprising a set of policies regarding
relationships between the EIF’s management, board, shareholders and other
stakeholders and containing important elements of a CSR policy, e.g. a transparency
policy, powers, attributions and duties of the governing bodies, development of a
Management Control and a Compliance function, tools for implementing and
monitoring strategy as well as a policy to fight fraud and corruption.
Through its procurement policy, EIF ensures that the works, goods and services
procured under its financing are of appropriate quality and are acquired at cost-
effective prices in a timely manner.
b. Sustainable Development
EIF’s mission is to facilitate access to finance for SMEs and, in particular, seed and
early stage. EIF’s transactions are oriented in line with the EU’s sustainable
development strategy, focusing on promoting:
the development of an innovation and knowledge-based economy by
facilitating the access to seed and early stage finance for SMEs;
projects in less-favoured areas within the EU, the new Member States and
Accession Countries (Objective I);
growth and employment through its specific support of SME financing.
5. EIF OPERATIONAL GUIDELINES AND POLICIES
EIF operations focus on the EU Member States, Accession and Candidate Countries.
EIF pursue its mission by
issuing guarantees and similar risk cover (e.g. credit default swaps) to
financial intermediaries for the purpose of covering the risk of SME financing;
taking equity risk primarily in venture capital funds which are established with
a view to finance seed and early stage capital for innovative, technology-
providing advisory services in relation to the establishment of venture capital
and other structures intended to facilitate access to financing for SMEs.
Value added is the cornerstone of EIF’s product range. Access to finance for SMEs
may be facilitated by
enabling financial intermediaries to free-up regulatory capital for additional
SME financing as a result of EIF’s guarantees which are supported by EIF’s
status as a multilateral development bank and the AAA rating attributed to EIF
by the major international rating agencies, Standard & Poor’s, Moody’s and
EIF’s role as a catalyst in connection with the establishment of venture capital
structures specialised in providing equity and equity-related seed and early
stage finance to SMEs through substantial minority investments and advisory
services, e.g. in connection with the setting up of regional fund structures.
CSR principles are central elements of the due diligence and negotiation process
performed by EIF staff in relation to operations. EIF’s operational guidelines and
negotiation practice aim at ensuring strict compliance with all applicable national
and EU laws, regulations and policies. In negotiations with its intermediaries, EIF
pays particular attention to protection clauses against money-laundering and insider-
dealing practices as well as to minimum investment standards which ensure, e.g. the
prohibition of arms trading or human cloning.
EIF follows a declared transparency policy and has adopted strict guidelines on anti-
fraud measures and its co-operation with the competent Community bodies and
EIF’s business strategy responds to Community requirements relating to CSR policies;
as member of the EIB Group, EIF CSR policies and guidelines are closely linked to
EIB CSR policies and guidelines.
EIF coordinates with the other Community bodies and the institutions of the European
Union and also cooperates closely with the business and banking sectors and the
main international organisations in its field of operations. In particular, EIF actively
manages various mandates from EIB, the European Community, Member State
governments and public or private financial institutions under which it disposes of
additional funds in trust to pursue its mission.
EIF actively participates in specialised professional associations and bodies, such as
the European Venture Capital and Private Equity Association (EVCA), with a view to
enhance CSR policies through the development of good market practice.
c. Environmental Issues
EIF adheres to the environmental laws, regulations and policies of the EU. It
considers environmental issues in its procurement policy and in the decisions on
office space and office equipment and ensures the protection of its staff against
office-related environmental risks.
EIF will comply with the forthcoming EU Regulations, in line with the Convention on
Access to Information, Public Participation in Decision-making and Access to Justice
in Environmental Matters (Aarhus Convention) signed by the countries of the United
Nations Economic Commission for Europe (including the EU and its members). This
Convention will increase accountability, transparency and responsiveness regarding
environmental matters with a view to the improved enforcement of environmental
d. Social Environment
EIF follows strict principles of transparency in its employment policies. Its HR policies
are aligned with EIB HR policies.
Job vacancies are duly published and follow the selection principles of EIB. The
selection decision is exclusively based on the professional competences of
candidates. EIF is an equal opportunities employer and encourages the candidature
Employment conditions and social benefits follow the standards applied in EIB. EIF
staff are represented by elected staff representatives who represent the EIF staff
collective interests vis-à-vis EIF’s management.
6. MONITORING AND AUDIT
Transactions are systematically monitored by EIF’s risk management and monitoring
division (RMMD) in accordance with internationally recognised monitoring standards.
EIF operates within a strong audit and monitoring structure, comprising of an Audit
Board, Internal Audit and External Audit, as well as the European Court of Auditors
when EU or Member State’s funds are concerned, which cooperates closely with EIB
Group audit and monitoring structures. These review the effectiveness and efficiency
of operations, activities, policies and procedures and validate EIF’s published Activity
and Financial Reporting.
EIF’s accounting principles follow European Directives for statutory accounts as
disclosed in the Annual Report.
EIF will report regularly on the development of its Corporate Social Responsibility
policies and practices.