CDC has produced internal and external case studies of investments where the ESG and financial performance of a company has improved through its approach to ESG issues. In one company, the ESG-I team worked closely with our technical assistance facility to generate a carbon finance revenue model through its core business, which entails carbon emissions savings. Following third-party validation and verification, the company sold its first carbon credits and this is anticipated to be a source of revenue beginning in 2020.
CDC has also measured cost savings as a result of ESG initiatives in some instances. For example, Rainbow Children's Hospital underwent energy and water use audits with CDC's support, which led to them implementing improvements that reduced their resource use and saved costs. They also became the first hospital in South Asia to receive IFC EDGE certification, which helped establish them as a market leader (https://www.cdcgroup.com/en/esg/direct-equity-investment-india/). In 2019, two hospitals were certified to the EDGE standard. Rainbow also installed solar panels at two hospitals in 2018 and a third in 2019, and report to CDC quarterly on cost and energy savings associated with their generation.
In other cases, CDC will identify opportunities to reduce absenteeism and increase productivity through job quality, and while these numbers can be hard to quantify, we receive feedback from our investees that these initiatives has helped overall worker morale and the bottom line.
As a DFI, CDC has a public commitment to responsible investment and believes that its approach to ESG due diligence and monitoring improves ESG and commercial performance in its investee companies.