Resource and Energy Efficiency Check Program (REC-Program)

The goals agreed in the Paris Agreement translate to achieving net-zero GHG Emissions in the second half of the twenty-first century. The industry, as a major global player needs to take an active part in contributing to the realization of these goals. Climate action under the Paris Agreement requires commitment, ingenuity, and finance engagement by policymakers. The private sector and finance community; delivering on the climate agenda also contributes to the broader Sustainable Development Goals.

As reflected in the Paris Agreement, there is an urgent need to act on promoting a rapid transition to net-zero and climate resilience. Green economic transformation has started worldwide, and DEG’s clients increasingly seek tailored advice and financing to manage their own transition, navigate climate risks, and future-proof their operations for sustainable business success. At the same time, societal challenges are exacerbated by the climate crisis. For DEGs, acting on climate change is thus also an essential component of delivering on impact.

To promote future-oriented companies in developing and emerging markets, DEGs has updated their business model and provide their clients—often medium-sized companies in Infrastructure & Energy, Industries & Services, and Banking— with superior impact and climate solutions geared towards fostering sustainable, resilient business models. For the first time, impact and sustainable financial returns are both equally important strategic targets for DEG. A new steering approach at portfolio level ensures an effective allocation of DEGs equity and resources, including DEGs internal carbon budget, to achieve these targets.

For these reasons, DEG present three commitments, which form the backbone of DEGs business in the coming years:

• Commitment to impact – increasing their clients’ positive impact on society and the environment, and thus strengthening our contribution to the Sustainable Development Goals (SDGs).
• Commitment to combating climate change – they will enter a reduction pathway in alignment with the Paris Agreement’s 1.5° C target, achieving a net-zero portfolio by 2040.
• Commitment to transformation – achieving their goals together: supporting their clients on their own transformative journeys towards positive impact and more climate resilience.

With the goal to foster sustainable growth and a lasting improvement in the living conditions of the local population, DEG provides long-term capital for profitable economic activities in the financial, agricultural, infrastructural and the manufacturing sector. DEG’s key strategy targets are impact, measured as the contribution to the Sustainable Development Goals, climate, DEG-commitment to a net zero portfolio by 2040 and return, sustainable profits that enable DEG to drive its business model without additional capital injections.

The main objective of the study is to carry out a Resource and Energy Efficiency Program which initiates and supports the climate transformation process of selected DEG customers.

The expected outputs of each REC are:

• Preparation of a systematic material flow overview (input/output mas balance);
• Identification and outlining of the most important resource savings opportunities (energy, water, waste).
• Determination of Scope 1 & Scope 2 and estimate of Scope 3 Carbon Footprint in accordance with the GHG Protocol Standard for Corporates.
• Determine the product carbon footprint and/or carbon intensity of production and contrast them with the EU taxonomy GHG benchmarks and IFC performance standards, where applicable.
• Development of a Paris-aligned climate transformation path towards climate neutrality until 2050 with clear measurable milestones on short (until 2025) and mid-term (2030 and 2035).

The Target Companies must be aware of the economic implications of their resource and energy efficiency potential and foresee the effects on their overall GHG emissions and carbon intensity of their products (product carbon footprints). In order to create transformation paths that are in line with the Paris Agreement, carbon accounting of Scope 1 to 3 in accordance with the GHG Protocol Standard for Corporates and/or applicable ISO standards must be added to energy and material efficiency consulting.

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