Overview of climate mainstreaming approach and goals:
CDC is a public investor created in 2011 with the goal of supporting the achievement of national priorities for sustainable development of Tunisia.
Among the five strategic axis leading CDC activities for the period of 2021-2025 “Supporting Tunisia’s energy and ecological transition towards a low-carbon economy resilient to climate change” is highly emphasized. Through this axis, CDC seeks to contribute to three SDGs 6, 7 and 13.
Principal Strategic Documents:
In order to manage and monitor the social and environmental impact in addition of its economic purposes, CDC has developed an impact framework which includes the impact on the climate. The impact framework encompasses three elements:
1/ The Additionality Statement,
2/ The CDC Theory of Change (ToC) and
3/ The CDC Impact Investment Policy.
- The ToC is based on market needs in terms of impact, in particular in terms of the fight against climate change, to formalize how its interventions are expected to lead to a change that can respond to them, through an analysis of causal links supported by evidence.
- The IIP provides a framework for CDC investments and financial placements, and it guides its supervisory board and staff decisions.
- The Additionality Statement guides CDC in establishing, measuring and documenting its contributions towards the achievement of its impact across all its interventions. The additionality of CDC’s interventions will be assessed based on the following 8 criteria (Financial, developmental, trust, demonstration, integration, knowledge, standards, ecosystem).
The Impact Reference Framework has just been completed and is being validated for publication.
Principal Tools and Methodologies:
CDC invests in a responsible fashion and as such, all CDC investments will be developed and implemented in accordance with national and international laws and regulations applicable to its activities. In 2019, CDC launched its Environmental and Social Policy (ESP) that describes the commitments, objectives and indicators defined for managing these types of risks.
The integration of ESG in its investment portfolio is in progress and with a primary focus on direct investments. CDC has developed an Environment and Social Management System (ESMS) that distinguishes critical and non-critical elements to consider. The non-compliance with non-critical elements will lead to the development of Environmental and Social Management Plan (ESMP) that seeks to achieve compliance over a reasonable time frame, taking into consideration the risks and opportunities specific to that business and its size and resources.
Also, as an impact investor, CDC aligns its interventions with the State’s commitments in the fight against climate change and aims to contribute to the objectives mentioned in the Tunisia’s NDC by 2030 and low strategy carbon by 2050.Thus, CDC has developed a scoring grid and adjusted its investment process to integrate additional procedures formalizing its impact intention such as for climate and allowing it to monitor it afterwards. The phases of CDC’s investment process include 4 key stages:
- Eligibility: At this stage, a preliminary evaluation of the investment opportunity both from the impact and financial perspective is made.
- Structuring: During this phase, the key focus is to show soundness of the impact thesis, that is, how certain activities will produce the effects that will lead to the expected outcomes, and what indicators can help measure those effects.
- Monitoring: The key focus at this stage is to check the fulfillment of expected effects by collecting and analyzing the data related to the selected indicators during the structuring phase. The main indicators related to the climate that will be monitored are:
- The amount of greenhouse gases avoided
- The number of units of energy saved
- Reporting: The key focus is contrasting the initial expectation with the actual results and determining what works best and where there are opportunities for improvement.
CDC has initiated its GCF accreditation process. It did its gap analysis, developed its action plan and implemented the actions. Now, it is waiting for the response from the fund board.
CDC commits to communicate, annually, all impact investments activities whether in a dedicated section of its activity report or, where applicable, in a specific impact report.