In 2012, TDB achieved a significant milestone by becoming the first commercial bank in Mongolia to adopt “Environmental and Social Risk Management System” (ESRMS), in partnership with the Dutch Development Bank (FMO).
This system applies to applications for loans for business purposes other than consumer loans, and we will be working with customers to identify and mitigate the environmental and social risks of respective businesses. TDB does not fund activities that are prohibited by the Law of Mongolia, IFC performance standards, or other international contracts, and conventions. For those activities, an "Exclusion list" is issued, and for loan applications to finance activities that are not included in the "Exclusion list", the level of risk will be determined depending on the borrower's core activities and the purpose of the loan, and will be classified and evaluated into 3 levels: green, yellow, and red.
Based on that assessment, we advise borrowers on measures to mitigate risk, where necessary, and review the implementation of additional covenants of the loan agreement over the contract period. Please see the risk identification, mitigation, and control system in the diagram below. contract is reviewed periodically. Please see our system of assessing, reducing, mitigation, preventing and monitoring risk from the following diagram.
Exclusion list"—what types of businesses do we not lend to?
- Any action prohibited by the laws of the country or international conventions relating to the resources and cultural heritage of biological species
- Activities, manufactures, and trades that are prohibited in many countries or that are considered illegal by the laws and conventions of that country
- Sale of wild animals and flora included in the Convention on the International Trade in Endangered Species
- Combat and Arms Trade and Products
- Alcohol production and trade (except beer and wine)
- Tobacco Industry and Trade
- Gambling, Casinos, and Similar Establishments
- Any business that promotes prostitution or prostitution
- Production and Marketing of Radioactive Substances.
Depending on the type of business activity, and sector, risk level is classified as shown below.
Red | Yellow | Green |
Mining & Enrichment | Agriculture | Trade in Food & Consumer goods |
Exploration & Production | Livestock | Hotels and catering services |
Hunting and Fishing | Repairing and Renovating | Information and communication services |
Timber Industry | Building material production | Financial and Insurance activities |
Roads, Bridges, and Buildings | Milk, and dairy production | Real Estate brokerage activities |
Alcohol and Tobacco trade and industry | Other food production | Education, Art, Entertainment, and entertainment services |
Meat and Skin processing | Metalwork Manufacturing | Human health& Social welfare activities |
Pharmaceutical products manufacturing | Electric Gas, Steam and Air Conditioning system manufacturing | Transportation and Warehouse operations |
Production of chemical originated products | Water supply, sewege system, waste management, and cleanup operations | Scientific, and technical research & activities |
Fuel Sales | Production of other types of products | Household activities, products, and services for the household that employ people |
A detailed assessment may require additional material from the customer. These include:
- Conclusion of the General Office of Professional Supervision and Authorized Body /workplace, product quality, certificate of origin, hygiene certificate, etc./
- Product Compliance Certificates and Standards
- Environmental Impact Assessments, Reports, and Plans
- Environmental Policy
- Occupational Safety and Hygiene, Instructions, Plans, and Emergency Plans
- Company Social Responsibility Policy and Operating Plan
- Internal Labor Policy, Human Resources Policy, etc.
In 2012, TDB achieved a significant milestone by becoming the first commercial bank in Mongolia to adopt “Environmental and Social Risk Management System” (ESRMS), in partnership with the Dutch Development Bank (FMO).
To Bank:
Implementing the experience of leading international banks in Mongolia
Reducing credit risk
Reducing environmental and social risks, thereby contributing to the sustainable development of the country.
To Client companies:
Avoid unplanned costs and risks. For example:
Preventing industrial accidents and reducing the number of accidents resulting from the costs and risks associated with accidents
Avoid the costs and risks that may arise from public protests arising from potential negative impacts on the company's public.
Prevent government or administrative fines and penalties arising from unauthorized activities or products or services that do not meet quality requirements.
Reduce operating costs by using green technology and saving energy and raw materials.
Increase income and profits by using appropriate machinery and technology, reducing waste, increasing production margins, creating a favorable working environment for employees, and increasing productivity.
Access to loans and financing at low interest rates.
The client company's public reputation will grow, and positive advertising will increase revenue and profits.
To contribute to the sustainable development of the country.
To the environment and society:
Reduction of water, soil, and air pollution
Climate Change Mitigation
Protecting Endangered Animals and Plants
Protecting Historical and Cultural Heritage
Fewer violations of human rights and freedoms.