ESMS

Al Baraka Bank Egypt is committed to ensuring that its business operations and commercial activities are carried out in a way that is both socially responsible and environmentally sustainable. The bank has committed to addressing, in a responsible manner, any potential environmental and social risks and repercussions that may be brought by its Financing and investing activities. While maintaining adherence to the tenets of Islamic finance, Al Baraka Bank has made it a priority to advance environmentally friendly practices as part of its mission to be a responsible Islamic financial institution. In doing so, the bank acknowledges that it is its obligation to safeguard the environment, maintain the dignity of human beings, and promote economic prosperity. The bank has been working in developing and adopting an Environmental and Social Management System (ESMS) to effectively address environmental and social risks and impacts. This system will enable the bank to identify, assess, and manage these risks in a comprehensive and systematic manner. Moreover, this system outlines the Bank's long-term commitment to the management of environmental and social (E&S) risks, and it makes these considerations an essential component of the Bank's overall risk management procedures.

Al Baraka Bank Egypt's senior management supports our Environmental and Social Management System (ESMS), reflecting the dedication to sustainability and ethical banking practices. We aim to implement this system effectively while continuously refining our policies. This helps us stay aligned with evolving global standards and developments, keeping Al Baraka Bank engaged in responsible finance. The bank's ESMS is meticulously crafted to conform with globally recognized standards, notably the International Finance Corporation's (IFC) Performance Standards. Additionally, it is intricately tailored to comply with pertinent national frameworks and regulations.

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    • Identify and analyze possible environmental and social risks and consequences related to bank financing and investment activities.
    • Develop and implement robust policies and procedures to effectively manage the potential environmental and social risks and impacts associated with bank financing and investment activities.
    • Continue to strengthen the bank portfolio's environmental and social risk management performance via improved risk management.
    • Promote sustainable development by incorporating environmental and social considerations into the business strategy and decision-making processes.
    • Facilitating access to financial services for underserved groups and MSMEs.
    • Engaging with local communities, NGOs, business associations, and other stakeholders via transparent communication channels in order to comprehend and address their ESG-related concerns and priorities.
    • Constantly enhancing the bank policies, processes, and performance through staff training, peer evaluation, and adoption of evolving ESG best practices.
    • Publicly reporting on ESG-related strategies, initiatives, and performance to demonstrate accountability and promote progress.

    The aforementioned policy statement serves as our declaration of dedication to all environmental and social concerns. It will undergo regular audits and reviews to ensure its alignment with evolving priorities and to ensure it remains relevant and effective in managing E&S risks and opportunities.

  • The ESMS initially covers Micro, Small and Medium Enterprises (MSMEs), as defined by the International Finance Corporation.

    Applicable Requirements

    • The IFC Exclusion List .
    • The relevant national laws on the environment, health, safety, and social concerns, as well as any standards set under those laws.
    • The IFC Performance Standards
    • Emerging Global Sustainability Standards which are evolving to incorporate broader aspects of E&S risks.

    • Screening and Risk Categorization: Identifies excluded activities and assigns initial risk categories to transactions.
    • Risk Assessment/Environmental and Social Due Diligence (ESDD): Includes desktop review and site visits to verify compliance and manage risks.
    • Mitigation and Management Planning: Develops Corrective Action Plans (CAP) for clients to implement necessary mitigation measures.
    • Monitoring and Auditing: Validates CAP compliance and conducts annual E&S reviews.
    • Reporting: Includes findings from ESDD, CAPs, and monitoring plans in reports.

    Legal Covenants

    Specifies E&S clauses in legal agreements with clients, requiring compliance with national and international E&S standards and periodic reporting on E&S performance.