Corporate Social Responsibility

Our global expansion into frontier emerging markets has only reaffirmed our commitment to serving all of our communities. It has also increased our awareness of our responsibility to act as a role model for ethical and sustainable business practices in our markets. As of 2017, we have aligned our operations with international and corporate ESG standards, and we continue to develop products and invest in companies that are tackling global challenges prioritized by the UNGC’s ten principles and the Sustainable Development Goals (SDGs).

Investing in Education

In May 2018, EFG Hermes Private Equity entered into an exclusive partnership with leading provider of private English-language education at the K-12 level GEMS Education to establish a USD 150 million 50/50 joint venture that is part of a USD 300 million educational platform. The goal of this platform is to provide quality education options in the underserved Egyptian education sector in which 20 million students are currently enrolled. In its first major project, the Egyptian Education Fund acquired four K-12 schools located in the Cairo suburbs of Madinaty and Al Rehab, and the fund has an additional 20 schools in its investment pipeline.

Investing in Energy

Over the past four years, EFG Hermes Private Equity has developed Vortex into the largest renewable energy-focused investment manager in Europe managing solar and wind assets with a cumulative capacity of 822 MW spanning the United Kingdom, France, Spain, Belgium and Portugal. Since 2014, Vortex has successfully deployed c. USD 1.4 billion in the European renewables market; today the platform is expanding into global markets with the aim of establishing a geographically diverse mix of clean energy assets with a target capacity of 1.5 to 2 GW.

Accessible Financing for MSMEs

In line with the Egyptian government’s Egypt Vision 2030 Sustainable Development Strategy and the Central Bank of Egypt’s call to provide funding to the small businesses that will drive the country’s growth, EFG Hermes has developed a variety of strategies for supporting the country’s micro-, small-, and medium-sized enterprises (MSMEs). This year, EFG Hermes Investment Banking acted as joint bookrunner on the GBP 125 million initial public offering of leading international microfinance lender ASA International (ASAI) on the London Stock Exchange. ASAI has over 1.9 million active clients across Asia and Africa, most of whom are women entrepreneurs.

We acquired the leading private microfinance lender Tanmeyah Micro-enterprise Services in 2017; over the past two years, we have introduced a variety of changes and made investments to enhance the efficiency of the company and expand its reach. 2018 saw Tanmeyah open almost 100 new branches across the country and doubled the total number of loans disbursed to 1 million clients served. Microfinance solutions are playing a crucial role in reducing poverty across the country because they provide capital to owners of very small businesses who are unable to seek support from traditional banks and lenders. Almost 70% of Tanmeyah clients reside in Upper Egypt, which has the highest rates of poverty in the country.

In May 2018, EFG Hermes Leasing, the other major business line of the Firm’ s non-banking financial services platform, launched a dedicated program to target partnerships that facilitate SME financing solutions and saw the contribution of SMEs in its portfolio grow to 16% compared to the 6% seen in 2017. Over the past three years, EFG Hermes Leasing has directed over EGP 500 million in funding to SMEs. EFG Hermes has developed a number of strategic alliances with Egyptian financial institutions to support SMEs including a partnership with HSBC Egypt to lend EGP 400 million to SMEs at low interest rates to fund capital expenditures as well as agreements with Egyptian Arab Land Bank and Ahli Bank of Kuwait to offer SMEs financing with subsidized interest rates. We have partnered with the Saudi Development Fund to finance SMEs across the country offering services in the areas of healthcare and renewable energy. Through vendor agreements with KarmSolar and Solarize, we are offering agriculture SMES solar power solutions via leasing facilities to reduce their energy costs.

Fighting Corruption

As a leading financial services corporation, EFG Hermes has a responsibility to fight corruption by operating in an ethical manner and actively promoting good governance in global markets. With this responsibility in mind, our award-winning Research division, which covers over 240 equities spanning 19 countries, has begun placing greater emphasis on corporate governance in its reports. Adoption of transparent policies and stringent anti-corruption measures have a significant positive effect on the risk profile of equities. By focusing on this issue in markets in which formal regulation of corporate governance is weaker, we hope to incentivize the adoption of ethical business practices and fight corruption across our footprint.

Established in 2016, our CSR Department is the owner of the Firm’s ESG policy and has the responsibility of communicating the policy throughout EFG Hermes. The department also coordinates the ESG Agenda as of the Firm’s Executive Committee meetings. This year, the CSR department has continued to oversee the integration of our ESG framework and the Principles for Responsible Investment (PRI) across all business lines by holding workshops, developing an e-Learning course for all staff members and raising awareness about issues that are material to our core business. The department held over 20 successful internal awareness campaigns to inform staff members about issues ranging from efficient water use to diversity and inclusion in the workplace.

Since its founding in 2006, the EFG Hermes Foundation has led the Firm’s efforts to make a positive impact on communities across the country. The Foundation has developed a reputation for effectiveness and innovation by pioneering an integrated approach to development projects that has allowed it to attract financial and logistical support from prominent public, private, and international partners.

Revitalizing Naga’ El Fawal and El Deir Villages in Upper Egypt

The Foundation’s latest integrated development project launched in 2017 aims to revitalize the social fabric of Naga’ El Fawal and El Deir village in the Luxor governorate where rapid population growth and high rates of unemployment have created significant economic and social challenges. Our financial partners in this EGP 70 million project include the Kuwaiti Initiative for the Support of the Egyptian People, the Sawiris Foundation for Social Development, and Orascom Construction, and it is ultimately expected to benefit over 75,000 people in Luxor. After conducting a needs assessment in partnership with the Luxor governorate, local authorities, and local community organizations, we have developed a holistic approach aimed to rehabilitate these villages by creating jobs, promoting education, and investing in key infrastructure.

In 2018, we delivered a four-month literacy education program for 23 people to improve their reading, writing, and numeracy skills in order to increase their employability. We also trained 23 local teachers in the internationally renowned Montessori method, and in partnership with the MOVE Foundation for Cerebral Palsy, we prepared an additional 24 teachers to identify and support students with disabilities. These teachers will staff a new Montessori-based nursery, which includes classes with special needs once construction is complete.

This project will ultimately rebuild 90% of Naga’ El Fawal’s existing homes inhabited by an estimated 234 families. To improve community infrastructure and healthcare, we refurbished the El Deir Health Unit, which serves 75,000 people in the surrounding areas. Working in partnership with Luxor Company for Water and Wastewater, we have replaced the asbestos-contaminated water pipe network in Naga’ El Fawal and we are in the process of installing a new sanitation network to ensure that community members have access to safe drinking water and sanitation facilities.

As part of our efforts to create jobs and foster economic empowerment in Naga’ El Fawal and El Deir village, we are collaborating with the Luxor governorate to construct a community center that will feature a nursery, sewing workshop, and vocational training center. Already, the community of the village has taken ownership of this project by establishing the local El Fawal Association for Integrated Development registered under the Ministry of Social Solidarity. This community development association aims to create income-generating projects in the community, as its leaders are working in partnership with the EFG Hermes Foundation to construct a new bakery.

Promoting Financial Literacy

For the fourth year in a row, EFG Hermes conducted seven Financial Literacy Programs at several Egyptian universities and high schools. This year, we expanded the program to include 150 high school students from Notre Dame des Apotres and New Ramses College in Cairo. As part of our effort to increase the financial literacy of Egyptian youth and encourage entrepreneurship, this year 13 EFG Hermes staff volunteers led a financial literacy program for 655 participating students from Cairo University and the Arab Academy for Science and Technology.

In 2018, two of the most powerful women in our Firm were recognized for their achievements in promoting sustainability and revolutionizing Egypt’s financial landscape. CEO of the EFG Hermes Foundation Hanaa Helmy was named a 2018 Sustainable Development Goals Pioneer by the UN Global Compact in recognition of her work fostering social development throughout Egypt. Under Helmy’s leadership, the EFG Hermes Foundation reached over 450,000 beneficiaries through initiatives focused on healthcare, education, employment, and other prominent issues in Egyptian society. The EFG Hermes Foundation led by Helmy has also pioneered a revolutionary integrated development approach through large-scale projects to revitalize the social fabric of communities in Beni Sweif, Qena, and Luxor Governorates. In 2018, Helmy was also named one of 18 Global Change Makers by the Economist Intelligence Unit for her oversight of the Foundation’s efforts to eradicate Hepatitis C in Egypt.

This year EFG Hermes Chairperson and Founder of Zulficar & Partners Monica Zulficar became the first Egyptian and first woman to receive the International Financial Law Review’s Lifetime Achievement Award. Zulficar is known as a precedent maker in local and international legal circles; she has led negotiations for some of the most complex transactions that have been executed in Egypt and the Middle East over the last 30 years. As a former member of the Board of the Central Bank of Egypt, Zulficar has also played an instrumental role in modernizing the country’s banking laws and regulations. Currently, she is a member of the National Council for Human Rights. Throughout her career, she has led several successful campaigns to create legislation on issues such as women’s rights, freedom of opinion, and family courts. Within EFG Hermes, Zulficar has been a fierce advocate for incorporating the SDGs into the Firm’s structure and corporate culture, and she is a strong supporter of the work of the EFG Hermes Foundation.

As part of the Firm’s commitment to public health, the Foundation laid the groundwork for a company-wide screening program for hepatitis C in early 2019. The endeavor falls in line with the government’s push to eradicate the disease and Helmy’s mission as HCV change maker to combat the illness throughout Egypt.

In early 2019, we submitted our first report as signatories of the United Nations Principles for Responsible Investment (PRI). We had originally planned to take advantage of the two-year reporting window for new signatories, but thanks to our accelerated ESG integration program, we are one year ahead of schedule.

We will continue to integrate our ESG policy into all areas of our business by conducting training and workshops with key departments, assessing our progress, and identifying areas of focus and improvement.