All businesses receiving CDC capital must sign up to and comply with CDC's Code of Responsible Investing, which stipulates CDC's ESG requirements. These are often above those required by local law. Among other things, the Code requires companies to assess, monitor and improve E&S standards.
The Code is structured to reflect CDC's ESG requirements, recommended good practices, and components of management systems that CDC legally requires. The Code sets out a hierarchy of ESG requirements, including an 'exclusion list' specifying industry sectors where CDC's capital cannot be invested, minimum ESG requirements of all businesses, and additional requirements for industries where the levels of ESG risk requires it. Based on its Code, CDC works with companies to build from compliance with IFC Performance Standards and strive towards the adoption of internationally recognised standards of good industry practice and areas of ESG 'value add' to the business.
CDC recognises that many businesses in Africa and Asia will not be in full compliance with its Code at the date of investment. In such cases, CDC will work with the business during due diligence to develop an action plan that seeks to achieve compliance within a reasonable timeframe, with clear deliverables and responsibilities.