Edison Investment Research

ProCredit Holdings: Flying High - ESG Edge Report

Sector report | 21/12/2020

ProCredit (PCB) is a Germany-based group operating  regional banks across Southeastern and Eastern Europe, as well as in Ecuador. The banks focus on SMEs and private middle-income and high earners. At end-September 2020, the group’s total assets stood at €7.1bn. ProCredit has extensive experience in supporting small and medium-sized enterprises (SMEs) in emerging economies, with a focus on Southeastern (SEE) and Eastern Europe (EE) and banking operations in Ecuador. PCB aims to positively contribute to the economic, social and environmental situation in these regions regions and create shareholder value in the process. This has been supported with a dynamic growth of its green loan portfolio (CAGR of 34% in 2016-2019), prudent credit, social and environmental risk management as well as long-term oriented approach to its clients and staff. PCB’s environmental, social and governance (ESG) efforts are reflected in its outperformance vs peers in the ESG scoring system that we have applied. Edison’s ESG Edge analysis aims to move away from historical data and focus on forward looking drivers and indicators. Our methodology starts by grounding our work through the analysis of the data points of other data providers and ratings agencies’. Our ESG Edge scores are derived in collaboration with our partner Rebalance and follow the guidelines of the Sustainable Accounting Standards Board (SASB) and use the Cambridge Impact Framework. We follow this up with management and employee interviews to validate our findings and get to the narrative behind the data. Our findings are condensed in this report to focus on key ESG drivers, transition opportunities and risks for the company. Please see our website for a more detailed overview of our methodology.