Sustainability has become an important facet of development goals shared by countries around the world. Sustainability’s aim is to do environmentally and socially friendly business and avoid E&S risks and by doing so create a business model that can develop sustainably in the long run. Furthermore, it takes into account issues such as responsible living of natural resources, restoring the nature, occupational health and safety, accessibility of financial services for all levels of society and better fulfilment of corporate social responsibility.

Globally, banks and financial institutions play important roles in the fulfilment of this goal. Under the same principle as credit risk rating and mitigation, banks can assess their customers’ environmental and social risk, and protect their customers’ from E&S risks by partnering with them to help them fulfill their social responsibility. And by doing this through their financing activity, banks can also avoid facing financial loss.

TDB, for the first time in Mongolia, in partnership with the Dutch Development Bank, has implemented a complete ESRMS which consists of Environmental and Social Management policy, Environmental and Social risk assessment of clients’ business activities in accordance with the latest methodologies and monitoring of their E&S risks.

This system refers to business loan requests only and excludes loans for personal use. In this system, we identify the clients’ E&S risks and help them mitigate these risks.

TDB will not finance business activities that are forbidden by international agreements, protocols, IFC’s performance standards and Mongolian laws and therefore has made “Exclusion list” of activities not to finance.

The businesses that are not included in the “Exclusion list” must be classified according to their business activity and loan transaction as either green, yellow or red.

Based on the assessment, when necessary, the bank sets covenants to loans and gives guidance to the clients on risk mitigation measures.

The fulfillment of the additional covenants in the loan contract is reviewed periodically. Please see our system of assessing, reducing, mitigation, preventing and monitoring risk from the following diagram.

What is the Exclusion list and what businesses do we choose not to finance?

• Any activity prohibited by host country legislation and international conventions relating to the protection of biodiversity resources and cultural heritage, including:
• Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans;
• Trade in wildlife or wildlife products regulated under Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES);
• Production or trade in weapons and munitions;
• Production or trade in alcoholic beverages (excluding beer and wine);
• Production or trade in tobacco;
• Gambling, casinos and equivalent enterprises;
• Any business linked to the sex industry and/or prostitution
• Production or trade in radioactive materials;
• Production or activities involving harmful or exploitative forms of forced labor / harmful child labor.
• Production or trade in wood or other forestry products other than from sustainably managed forests;
• Trade in goods without required export or import licenses or other evidence of  authorization of transit from the relevant countries of export, import and, if applicable, transit;

Depending on the type of business activity, and sector, risk level is classified as shown below.

When conducting due diligence, the following documents may be requested from the customer. These include:

• Statements from Metropolitan Professional Inspection Agency and other authorities regarding workplace safety, fire safety, product origin, and health inspection.
• Product certifications, standards;
• Environmental Impact Assessment, report, and plan;
• Environmental management plan;
• Occupational health and safety procedures, emergency plan;
• Social responsibility policies and plan
• Internal labor policy, human resources policy, etc.

By implementing E&S policy, following advantages arise for the Bank, the customer and the environment and society.

For the Bank:

• Internationally accepted standards put into practice in Mongolia;
• Reduces credit risk;
• Contributes towards the sustainable development of the country by reducing environmental and social risks.

For the customer:

• Prevents unplanned expenditures and risks. For example:
  • Prevents workplace accidents, reduces the occurrence of accidents, and thus prevents expenditures related to accidents and thus, cuts down risk;
  • Prevents costs due to public discontentment by mitigating risks with negative consequences on the society and reduces risk;
  • Prevents fines and disciplinary actions from the authority due to illegal business and unsatisfactory service and products.
• Reduces the cost of operation by using green technology and thus, reducing the use of energy and valuable raw materials;
• Increases profit by using upright technology, reducing waste, increasing production output, providing a safe and comfortable workplace, and optimizing productivity;
• Access to cheaper loans and finance;
• Good reputation, and marketing among the public which increases sales and profit;
• Contributes towards the sustainable development of the country.

For the environment and the society:

• Decreases water, ground and air pollution;
• Slows down climate change;
• Conserves endangered species and plants;
• Preserves cultural and historical heritage;
• Prevents violation of human rights.

2018

• As the ToC leader bank of 2018, TDB organized the Sustainable Finance international forum successfully in partnership with the Mongolian Sustainable Finance Association on 10th of December, 2018.
• TDB provided 350 mln. MNT of financing to Achlalt Khuukhduud NGO which provides accommodation, restoration and recovery care to the disabled and the elderly to purchase their own building. Moreover, to further support this cause, TDB’s employees raised and donated 20.0 mln. MNT.
• The representatives of the banking and financial institutions of Cambodia visited Trade and Development Bank as part of their tour to Mongolia to learn about the Sustainable Finance Initiative. During the meeting, TDB shared their experience and practices regarding the environmental and social risk management system, policy and procedures, assessment tools and methodologies, and mitigation and management of the clients’ E&S risks.
• In cooperation with “My club” NGO, TDB joined the annual “Green future” initiative for the fourth year. TDB’s employees together watered over 8,000 trees in Argalant Soum, Tuv province where desertification is increasing rapidly.
• TDB held an open day and facilitated an introductory seminar on Sustainable financing at the National University of Mongolia and University of Finance and Economics as part of the “We are Bankers” campaign.

2017

• TDB was awarded “The Best Sustainable Financing Bank of 2018” by the Mongolian Bankers Association for the second straight year for developing a complete ESRMS, implementing Sustainable Finance principles, implementing projects that are of high importance and leading the other banks.
• TDB has done assessments on the clients’ E&S risks and is working to reduce their risk. Where necessary, the bank has set covenants on loans and monitored the implementation of the covenants 75% of which has already been fulfilled.
• TDB had its second external audit done to its ESRMS by Dutch development bank and “SEC” LLC Mongolian environmental counseling company and received a “Good” rating with a score of 90.04%
• TDB has donated 821 animal covers, 1050 bags for newborn animals, candles, stitches, gloves and other necessities and over 400 cubes of grass and over 50 bags of brans all of which together cost over 10 mln. MNT to support herders under the program “Kindhearted help for herders”
• In cooperation with “My club” NGO, TDB joined the annual “Green future” initiative by watering 8,000 trees in Argalant Soum, Tuv province where desertification is increasing rapidly.
• TDB held a project competition called “GREEN OFFICE” to help create green job opportunities that are environmentally friendly and cost saving. The projects selected as the best will be implemented starting 2018 in the company’s operation.
• In cooperation with the Tuul river basin administration, TDB organized an event to clean the Tuul river basin for the second year. During the event, over 400 employees of TDB picked up about 900 bags of trash from the Tuul river bank from a 6 km long area. 
• TDB’s employees  donated 4 Mongolian traditional yurts worth 10,000,000 MNT to National Emergency Management Agency to aid their rescue mission.

2016

• In cooperation with “My club” NGO, 200 employees joined the “Green future” initiative by donating 896,000 MNT and watering 8,500 trees in Erdene Soum, Tuv province.
• TDB made its loan issuance process “GREEN” by decreasing the paper use in the loan issuance process. By making this process electronic step by step, we have saved 198 trees, 392 tons of water, 22 tons of carbon, 16 tons of waste.
• TDB was awarded “The Best Sustainable Financing Bank of 2016” by Mongolian Bankers’ Association.
• 450 workers of TDB partnered with Tuul river basin administration and cleaned the river bank and collected over 880 bags of trash from over 9 km long area.

2015

• TDB’s workers have received trainings on Sustainable Finance policies both inside and out of the country on a continual basis.
• Within the framework of 8 policies and 4 sector guidelines from the Sustainable Finance Initiative, TDB made changes to its E&S policies and procedures and added specific requirements for clients from different sectors.
• TDB started offering service to its disabled, pregnant and elderly customers in all of its branches with no queues.
• TDB donated 10,000,000 MNT to 109 families from Dornod, Khentii, and Sukhbaatar provinces whose homes got caught in the fire.
• TDB made its ATMs and website friendly for visually impaired, elderly, and illiterate customers.
• TDB built entrances for its disabled customers in its head quarter and all of its new branches.
• Branch employees have cooperated with Myclub NGO and planted trees in Umnugovi, Dornogovi, Darkhan-Uul provinces and in Baganuur district where desertification is increasing rapidly and contributed towards protecting the environment.
• TDB has provided its loan managers with ESRMS trainings and seminars to develop their skills continuously.

2014

• TDB provided its workers with trainings on Sustainable Finance policies in and out of the country consistently.
• TDB partnered with experienced international consulting organizations that work in the environmental field.
• TDB identified the major risks in every sector of the economy and updated the required set of documents for loan request to reduce their risk, covenants for different sectors, and renewed its procedures for account managers.
• To raise awareness among its employees, TDB started a Sustainable finance section in its internal web to inform them about E&S policies, training and global experiences.
• To better assess risks, TDB updated the codification system of every specific sub-sectors to more specificity and implemented this to its E&S risk assessment system. 
• TDB will continue to improve its Sustainable finance management system by implementing globally recognized measures and protecting its customers from risk to support sustainable development and thus ensure a good future for the next generations.

2013

• TDB had an external audit done by PwC to assess the implementation of its E&S policy.
• Together with Mongolian Banker’s Association and Dutch Development bank, TDB organized the first ever Sustainable Finance forum of Mongolia.
• TDB signed a Memorandum of Understanding to support and implement the Sustainable Finance policies.

2012

• TDB initiated the development of the Environmental and Social Risk Management System.
• TDB trained its account managers and E&S risk analysts.
• With the help of PwC, TDB developed a complete ESRMS to assess environmental and social risk of clients, ESRMS policy and procedures, monitoring and risk management.

How to submit a complaint to TDB regarding a GCF-funded project or programme?

You may submit your complaints through the following channels.

Online form:

Click HERE to submit a complaint online.

Email:

You may send your complaint to projectgrievances@tdbm.mn

Mail:

You may mail or hand-deliver your complaint to TDB’s Head office located in Peace Avenue 19, 1^st khoroo, Sukhbaatar district, Ulaanbaatar city.

The complaints you submit must have the following information in order to be eligible:

- Name, phone number, email address, home address and signature of the complainant

- Name of the GCF-funded project or programme at issue

- Description of the harm that has been caused or might be caused by the GCF-funded project or programme

- Whether the complainant has contacted the project implementer to resolve the harm

- Results the complainant hopes to achieve by submitting the complaint

- Whether the complainant is requesting that their identity be kept confidential