Microfinance & Environment: Why do microfinance institutions go green? Marion Allet Université Libre de Bruxelles, CERMi UMR 201 « Développement et Sociétés », Université Paris 1 – IRD mallet@ulb.ac.be 14/12/2010 Abstract In recent year, in addition to its financial and social objectives, the microfinance industry has started to look at its environmental bottom line and develop ‘green microfinance’ programs. The objective of this article is to provide some insights on this quickly growing phenomenon, by identifying why microfinance institutions decide to go green. Basing our analysis on the results of a qualitative study and on the mobilization of organizational decision-making theories from the Corporate Social Responsibility literature, we find out that, in the absence of prevailing social norms regarding the role that microfinance should play in environmental management, the decision to engage in green microfinance still depends more on the perceptions of individual managers. Today, microfinance institutions that decide to go green are institutions where proactive leaders act as environmental champions with an integrated approach, capacity to innovate and ability to access required technical expertise and resources. Key words: microfinance; environment; triple bottom line; corporate social responsibility; organizational decision making Allet M. – Why do MFIs go green? – 14/12/2010 1 / 26 INTRODUCTION Climate change, natural resources depletion and pollution problems have put environmental issues high on the global development agenda. Recently, these issues have also been raised in the microfinance sector, with promoters of a ‘green microfinance’ advocating that microfinance, beyond its double financial and social bottom line, should include a third environmental objective as well (GreenMicrofinance, 2007; Rippey, 2009; Van Elteren, 2007). New concepts have then emerged in the microfinance sector: that of a triple bottom line of ‘profit, people and planet’ (Araya & Christen, 2004), defined around the objectives of ‘maintaining financial viability while advancing the social interests of stakeholders and protecting the environment’ (Rippey, 2009); and that of a green microfinance, a microfinance that integrates the principles of environmental sustainability in all its operations and promotes environmentally-sound practices (GreenMicrofinance, 2007). A growing number of microfinance institutions (MFIs) are indeed starting to adopt procedures and develop products seeking to mitigate their environmental impact and promote a more sustainable development. They may do so through different strategies and actions: (a) reducing their internal ecological footprint, by taking actions at the institutional level to decrease their energy, paper, water consumption, waste production, carbon emissions, etc. (e.g. ACLEDA, Cambodia; MiBanco, Peru; XacBank, Mongolia); (b) using part of their proceeds to support the development of environmental projects, like the planting of trees in natural parks (e.g. Banco Solidario, Ecuador); (c) screening and monitoring loans according to environmental criteria, in order to manage the environmental impact of clients’ activities and avoid supporting practices that are highly polluting and/or that deplete natural resources (e.g. Apoyo Integral, El Salvador; K-Rep, Kenya); (d) tailoring products and services to support environmentally-friendly activities, practices and technologies, such as renewable energies, energy efficiency, agroforestry or conservation agriculture (e.g. BRAC, Bangladesh; FINCA, Uganda; Grameen Shakti, Bangladesh); or as well (e) organizing awareness-raising campaigns or training sessions (e.g. CAMIDE, Mali; CEPRODEL, Nicaragua). These MFIs are pioneers in adopting a triple-bottom-line approach (financial, social and environmental). Up to now, many of those who are engaging in green microfinance are still at a design or pilot phase. But green microfinance is a fast-growing phenomenon, which has been drawing increased attention from the microfinance community in the past years. More Allet M. – Why do MFIs go green? – 14/12/2010 2 / 26 and more MFIs are developing or planning to develop environmentally-friendly products and services. Microfinance donors and investors are beginning to include environmental criteria in their due diligence requirements. Some technical assistance providers (donors, NGOs) are setting up support programs to encourage environmental management by MFIs 1. Dedicated websites2 have started to gather the few (but growing number of) publications existing on the subject. The topic of ‘green microfinance’ starts being introduced into university curricula on microfinance. And the issue is even being discussed now in specific roundtables organized in major international microfinance events3 or in discussion forums set up on the internet4. However, very few studies have tackled the issue so far, and the relevance and effectiveness of a green microfinance is sometimes questioned by microfinance professionals. Some practitioners indeed argue that this environmental bottom line does not respond to a need or priority for microfinance clients, that it would only bring about additional constraints and costs for MFIs and their clients, or that microfinance institutions are not in a position to address the issue in an effective manner. The objective of this article is to provide some insights on the rationales behind the fastgrowing phenomenon of green microfinance. Basing our analysis on the results of a qualitative study and on the mobilization of organizational decision-making theories from the Corporate Social Responsibility literature, we will address the following questions: What are the interests that microfinance institutions identify for engaging in environmental management? How do they conceive their role in managing an environmental bottom line? How relevant do they consider green microfinance? Or, in other words: why do microfinance institutions decide to go green (or not)? After reviewing the main arguments for engaging in green microfinance as they can be found in the existing literature, we will briefly introduce the research methodology used in this paper. We will then present our main findings regarding MFIs’ rationales for engaging or not in green microfinance, and discuss the main implications of our results for the future promotion and development of green microfinance strategies. This is the case of the ‘Greening the Microfinance Sector’ project launched in 2007 by the Foundation for a Sustainable Society Inc. (FSSI), in the Philippines, or of PlaNet Finance projects under the Microfinance & Environment Business Line. 2 Microfinance Gateway and GreenMicrofinance Centre websites 3 European Microfinance Week 2009 and 2010, Microcredit Summit Campaign Latin America & Caribbean 2009, etc. 4 www.microlinks.org 1 Allet M. – Why do MFIs go green? – 14/12/2010 3 / 26 LITERATURE REVIEW The recent nature of the green microfinance phenomenon is clearly reflected in the scarcity of academic literature existing on the topic today. A few articles published in scientific journals tackle the issue of microfinance and the environment (Borge, 2004; Chowdury, 2008; Herrold-Menzies, 2006; Kaushal & Kala, 2005; Mbile, et al., 2005). But they usually focus on microcredit programs set up within environmental projects – such as Integrated Conservation and Development Projects implemented in protected areas since the 1980s – and not yet on microfinance institutions setting up environmental management programs – a much more recent phenomenon. Some professionals have consequently been calling for a research agenda in microfinance and environment (GreenMicrofinance, 2007). Meanwhile, the issue is being tackled by a growing grey literature. Some articles and studies written by microfinance practitioners are based on case studies and identify lessons learned from pioneer experiences (Wild, et al., 2008; Morris, et al., 2007). But a large number of publications are still very theoretical: they only present the potential actions that MFIs could undertake to tackle environmental issues, and the potential benefits that they could expect (Araya & Christen, 2004; Hall & Lal, 2006; Pallen, 1997; Rippey, 2009; SEEP Network, 2008). Similarly to some of the literature on Corporate Social Responsibility (Castelo & Lima, 2006), this grey literature puts emphasis on two types of rationales that would lead MFIs to engage in environmental management: (1) ethical motives (moral commitment, desire to do good), and (2) instrumental motives (enlightened self-interest). The ethical argument used in the literature is based on the idea that MFIs should manage environmental issues in order to effectively contribute to poverty alleviation and sustainable development. It is not uncommon to hear that microfinance clients, because they are poor and are only engaged in small-scale activities (especially in the trade sector), do not have a significant impact on the environment. Indeed, contrarily to big industrial companies or developed countries economies, microfinance clients cannot be held responsible for climate change. Yet, promoters of green microfinance often emphasize three main reasons why microfinance clients are concerned with environmental issues: (a) some specific microactivities can entail environmental risks, (b) environmental risks can translate into direct threats to the livelihoods and health of the microentrepreneur and his surrounding community, and (c) managing environmental issues can generate positive economic returns to the microentrepreneur. Allet M. – Why do MFIs go green? – 14/12/2010 4 / 26 First, microfinance clients are concerned because there is evidence today that some of the activities held by microentrepreneurs can have an adverse effect on the environment, may it be in terms of pollution (chemical use, solid and liquid waste contamination, etc.) or deterioration and unsustainable use of natural resources (deforestation, soil degradation, overexploitation, etc.). Even if their impact on global warming may be insignificant, such activities can have a destructive, cumulative effect at a local level. This negative impact can be due to production methods, inputs use, inefficiency of the production technologies, or waste and output management (Hall, et al., 2008). Some specific sectors have been identified as being particularly at risk, such as leather tanning, brick making, metal working, textile dyeing, small-scale mining, charcoal making, food processing, crop growing, animal husbandry, fishery, etc. (Blackman, 2000; BRAC, 2006; Hall, et al., 2008; Pallen, 1997; Wenner, 2002). Second, microfinance clients are concerned because such environmental risks represent direct threats to their livelihoods and that of their relatives and surrounding communities. Indeed, natural resources are the only assets readily available to the poor (microfinance target population), who rely on them for the provision of energy, food, housing material, medicinal treatment, income, fodder for livestock, etc. 70 per cent of people living with less than US$1 a day live in rural areas with high dependence on natural resources (Roe, 2003). And according to Araya & Christen (2004), at least 80 per cent of the needs of the poor are actually derived from biological resources. Because they rely heavily on natural resources for survival, the poor are the most affected by environmental degradation (Hall, et al., 2008). The contamination or overexploitation of natural resources can directly translate into the loss of inputs for their various activities, the loss of an income-generating opportunity (Benjamin & Wilshusen, 2007), the loss of a risk-coping mechanism (natural resources are often used by poor households as a safety net in case of shocks), increased conflicts over scarce resources (Pallen, 1997) or increased vulnerability to natural disasters. Furthermore, unsafe environmental practices can represent direct threats to people’s health and life. Inappropriate use and management of chemicals, machines or waste can generate significant health and safety hazards that can be harmful for the microentrepreneur, his family, and even the surrounding communities in case of air, soil or water contamination (Pallen, 1997; Redmond, et al., 2008; Wenner, et al., 2004). Third, microfinance clients are concerned because managing environmental issues can help them improve productivity and grasp business opportunities. Environmental management Allet M. – Why do MFIs go green? – 14/12/2010 5 / 26 often entails reducing inefficiencies in the production process: reducing chemical use to the minimum level necessary, using energy-efficient technologies (such as improved cookstoves, efficient fridges, energy-saving light bulbs), limiting or recycling wastes, etc. All these improvements in the production process not only limit environmental risks, they also allow cost savings for the microentrepreneurs. Moreover, environmental management can also help improve working conditions and therefore reduce the risk of accident (and its adverse economic impact) and increase productivity and profits. Finally, environmental management can lead microentrepreneurs to explore new business opportunities with a clear added value, such as ecotourism, waste management and recycling, agroforestry, solar panel installation and maintenance, etc. According to the existing literature, adapted green microfinance programs that help microentrepreneurs identify and manage environmental risks and opportunities could thus bring them benefits on a triple bottom line: environmental (reduction of environmental risks), social (improved working conditions, reduction of health and safety hazards) and economic (sustainability of livelihood, improved efficiency, new business opportunities). MFIs’ rationale for going green would thus follow an ethical commitment: that of fulfilling their social mission of poverty alleviation and promotion of sustainable human development5. The second type of argument used in the literature is an instrumental one: another motive for engaging in green microfinance is that it would entail clear strategic and financial benefits for the institutions themselves. First, by tackling environmental issues, MFIs could gain access to new funding from socially responsible investors (SRIs) or environmentally-sensitive donors, which could help them expand their activities and eventually reduce their capital cost (GreenMicrofinance, 2007; Pikholz, et al., 2005; SEEP Network, 2008; UNEP-FI, 2006). Second, they could diversify their offers, explore niche markets, differentiate themselves from competitors and attract clients by proposing appealing ‘credit + services’ packages, for instance assisting clients to increase their productivity through access to energy-efficient technologies or training in sustainable production techniques (Araya & Christen, 2004; Hall, et al., 2008; Schuite & Pater, 2008; SEEP Network, 2008). Third, they could improve the public image of their institution, and thereby foster staff motivation, enhance market expansion, improve external relations and avoid bad reputation risks that could negatively impact their activities (Hall, et al., 2008; Rippey, 2009; SEEP Network, 2008; Van Elteren, 5 For a discussion on the social mission of MFIs and ethical issues, see Armendariz & Szafarz (2010) or Hudon (2009). Allet M. – Why do MFIs go green? – 14/12/2010 6 / 26 2007; Zutshi & Sohal, 2004). And fourth, still according to green microfinance promoters, MFIs could reduce their credit risks thanks to the management of clients’ environmental risks. The argument here is that environmental risks can reduce the solvency of the client: his business may become unsustainable due to the depletion of natural resources, he may face reputation problems that will affect his activity, he may get fined for not respecting environmental regulations, he may have health problems because of some pollution issues, he may become more vulnerable to natural disasters, etc. Managing the environmental risks of the clients would then avoid that they directly translate into credit risks for the MFI (Coulson & Dixon, 1995; FMO, 2008; Triodos Facet, 2009; UNEP-FI, 2006; Van Elteren, 2007). MFIs’ rationale for going green would thus follow an instrumental incentive: environmental management is motivated by the strategic and financial benefits that can be expected from it. The ethical and instrumental arguments put forwards by the existing literature however remain very theoretical and lack any scientific, empirical study on the reality of these advantages. Can actually all types of green microfinance programs automatically reach their objectives of poverty reduction and sustainable development? Can they be efficient in reducing environmental risks without implying some social or economic trade-offs for the microentrepreneurs? One could think, for instance, that a microfinance institution adopting environmental criteria in its loan screening process may end up excluding poor people just because they lack the knowledge or capacity to upgrade their business environmental practices. Or that an MFI imposing specific environmental contract clauses may oblige a microentrepreneur to adopt a new technology or practice that is not seen as culturally acceptable, or that entails important economic costs (cost of upgrading production equipment, cost of learning new processes, etc.). As for strategic and financial benefits, how important can they actually be for MFIs? Reputation risk, for instance, may not be so high in a context where microentrepreneurs will never be responsible for large-scale contamination accidents, and where MFIs are not held accountable yet for the environmental behaviour of their clients. Employees may not feel more motivated if their workload is increased because they are asked to assess the environmental performance of their clients while maintaining the same level of productivity. As for credit risk, its link with the environmental risks of microfinance clients seems very indirect, and research in this area would have a hard time proving any correlation, due to attribution problems and time mismatch. The only limit to engaging in green microfinance that is regularly mentioned by the grey literature is the financial cost of setting up environmental management processes or programs (Araya & Christen, 2002; Coulson & Allet M. – Why do MFIs go green? – 14/12/2010 7 / 26 Dixon, 1995; Wenner, 2002). Indeed, an MFI willing to identify the environmental risks of its clients’ activities and train them to mitigate these risks needs to acquire new competences and develop new procedures. Including environmental appraisal and follow-up may slightly decrease staff productivity. And offering innovative products, such as long-term loans for solar home systems, may also entail higher credit risk for the institution. As summed up in Table 1, the existing literature thus emphasizes that there are two types of motivations that can (or should) make MFIs go green: ethical rationales, based on the commitment to fulfill a social mission through promoting sustainable human development; and instrumental rationales, based on the enlightened self-interests of the institutions. Are these arguments actually compelling to MFIs? Are microfinance institutions aware of the potential benefits of managing environmental issues, and are they motivated by them? Is financial cost the only brake preventing them from going green? Beyond the theoretical arguments presented in the existing literature, this article will seek to identify what are the real motivations that lead MFIs to engage in green microfinance today. Table 1. Rationales for engaging in green microfinance according to existing literature Ethical arguments (Clients’ interests) Instrumental arguments (MFI’s interests) Potential benefits / opportunities Potential costs / limits Contribution to poverty alleviation and sustainable development: Reduced environmental risks Improved working conditions Reduced health and safety hazards Increased efficiency and sustainability of clients’ business Improved image / reputation Access to new funding (SRI, etc.) Enhanced competitiveness / diversification Exploration of new markets Increased staff motivation Reduced credit risk Trade-offs with economic and social bottom lines for the microentrepreneur? Financial cost of setting up new management processes / new programs RESEARCH METHODOLOGY In order to identify the motives driving MFIs to engage in green microfinance, an inductive, qualitative approach was privileged. This methodology is the most adapted to explore an emerging phenomenon such as green microfinance, since it enables to reveal decision-making processes, diversity of rationales and perceptions. Allet M. – Why do MFIs go green? – 14/12/2010 8 / 26 The microfinance literature usually highlights the determining role of managers in strategy design, especially in setting up core values and goals and a long term vision (Copestake, et al., 2005; Labie, 2005). It was thus decided to explore decision-making processes for engaging in green microfinance by looking at the perceptions of MFIs’ top managers. In this perspective, extensive interviews were conducted between November 2009 and December 2010 with twenty MFIs’ executive directors or deputy-executive directors, coming from fifteen different countries (Bosnia & Hezergovina, Burkina, Cambodia, Egypt, Ethiopia, Indonesia, Kenya, Mali, Madagascar, Mexico, Morocco, Pakistan, Philippines, Tanzania, Uganda). Our objective was to identify what determines the decision to engage (or not) in green microfinance. Consistently with a qualitative approach (Pratt, 2009), it was decided to interview a sample of institutions with diverse profiles in terms of geographical location, legal status (cooperative, NGOs, non-bank financial institutions), age, size, and above all level of involvement in green microfinance. Some were chosen because they are already involved in green microfinance, but others were selected as well because they are not. Even though this sample is still limited, it nevertheless enables to identify the main issues and the diversity of rationales behind engaging (or not) in green microfinance. We made a deliberate choice to privilege face-to-face interviews, since it better enables to create trustful and information-rich exchanges. This decision logically induced some data collection constraints, since it was not possible to travel extensively to meet a wide range of MFIs’ managers in their countries of operation: six interviews were actually conducted incountry during professional field visits (Egypt, Mali, Morocco), while the other fourteen were undertaken in Europe, at the occasion of international conferences or business trips. An open, semi-structured protocol was established to guide the interview and get information both on practices and perceptions. The protocol specified a flexible list of topics to be tackled, among which were: definition of the MFI’s mission, perception on the importance of clients’ impact on the environment, opinion on the role of MFIs in tackling an environmental bottom line, capacity of MFIs to implement environmental management programs, level of engagement in green microfinance, history of engagement in green microfinance (when relevant), strategic interest for going green, and potential pressures from stakeholders. Specific attention was given to the formulation of the questions in order to avoid biases, presenting both arguments and counter-arguments on each topic so as to assess interviewees’ reactions. The interviews were conducted in English, French or Spanish, according to the language privileged by the interviewee. Some of the quotations used in this article were thus Allet M. – Why do MFIs go green? – 14/12/2010 9 / 26 translated from French and Spanish to English by the author. The interviews lasted on average thirty minutes. They were all recorded and transcribed. In order to avoid introducing any preconceived analytical biases, the collected information was first clustered to identify emerging themes in an inductive approach. Then, a dialogue was initiated between our results and theories from the corporate governance and Corporate Social Responsibility (CSR) literature. We did not privilege any single theoretical framework, but rather chose to consider a variety of organizational decision-making theories (stakeholder theory, convention theory, management innovation, etc.) and mobilize the analytical insights most relevant to enlighten our empirical results. All results were furthermore interpreted in light of contextual information gathered through extensive documentary review (donors and NGOs’ publications, investors’ appraisal formats, rating agencies’ reports and questionnaire templates, MFIs’ annual reports, etc.) as well as additional semi-structured or informal interviews conducted with other microfinance stakeholders (clients, employees, investors, donors, rating agencies, etc.). FINDINGS A widespread concern about environmental issues Results from our research first reveal that interviewed managers are widely aware that microfinance clients are concerned by environmental issues, both as actors (because they may be engaged in environmentally-risky activities) and victims (because they live and work in unsustainable and hazardous conditions). This level of awareness can however vary from one manager to the other: Yes, there may be a negative impact on the environment. For instance, we finance textile dyers. And dyers, as you know, are polluter agents! […] But we can say that the proportion is not big, it is minimal compared to other sectors of activity. […] It is only very slightly perceivable. Deputy Director, MFI 9, Mali I think that they [microfinance clients] not only can, they DO have a very big impact on the environment, and to a very large extent. From the following perspectives: […] most of them use processes and systems that, often, are not very friendly to the environment. So, they can and they do have a big impact on the environment. Director, MFI 6, Kenya Allet M. – Why do MFIs go green? – 14/12/2010 10 / 26 Similarly to what is highlighted in the literature on Corporate Social Responsibility, one can assume that these differences in perceptions are due to some individual factors, such as individual moral development, knowledge, values, attitudes, intentions, etc. (Ferrell & Gresham, 1985, cited in Jones, 1991; Logsdon & Yuthas, 1997). According to their own values, beliefs and awareness of environmental issues, some MFIs’ managers may thus be more or less sensitive to the importance of environmental management for ensuring the sustainability of their clients’ livelihoods and achieving their social mission. Differences in perceptions may also be explained by what Jones (1991) calls the moral intensity of the issue. Indeed, among our interviewed sample, managers tend to be more sensitive to one or two specific environmental issues that are closer to their daily concerns: deforestation for managers working in drought-prone rural areas in Mali, or waste management for managers working in periurban slums in the Philippines. Despite these variations in perceptions, our study still reveals that there is an overall consensus over the importance of the environmental bottom line. No managers would question the ethical argument promoted in the literature: that environmental issues need to be tackled in order to ensure a sustainable, human development. But not all would agree that MFIs are the actors that should take actions in this perspective. Controversy over the positioning of the microfinance industry Minimalist vs. integrated approach Even if MFI managers are aware of the potential environmental risks of their clients’ activities, they may consider that it is not the role of a microfinance institution to tackle this issue. The decision to engage in green microfinance is indeed strongly determined by the mission definition and position that MFIs have adopted. This draws us back to a well-known and controversial debate concerning the limits of microfinance mission (Servet, 2006). Should microfinance only be about the provision of financial services? Or should it have a more holistic approach aiming at poverty alleviation and sustainable development? Indeed, the likelihood to engage in green microfinance turns out to be strongly conditioned by the position chosen by the MFI between a minimalist and an integrated approach. For MFIs with a minimalist approach, the role of the microfinance industry should be limited to providing excluded populations with access to financial services, and not engaging in supporting business development or livelihood improvement through capacity-building or any other additional services. MFIs may have adopted such a minimalist approach because they Allet M. – Why do MFIs go green? – 14/12/2010 11 / 26 are primarily commercially-oriented; or because they believe that providing vulnerable populations with access to financial services is already in itself a contribution to poverty alleviation, and that other organisations are more suited to address development issues outside of the financial inclusion one. For such MFIs, engaging in environmental management is thus perceived as being out of their scope, and even as constituting a mission drift: What we look first is the financial interest that we can get from this financing. But we little worry about the consequence that can be linked in terms of environmental destruction following our client’s activity. Deputy-Director, MFI 9, Mali Our role is limited to financing. Environmental pollution is devoted to other services, other technical structures that handle it. […] When you enter into environmental protection, you drift from your objectives. Head of credit service, MFI 10, Mali This vision directly relates to the functionalist argument often heard in the Corporate Social Responsibility debates, according to which the primary function of a business is to provide goods and services to clients and profits to investors; and other types of functions, such as social and environmental ones, are devoted to other actors which have the skills or time required to implement them (Parsons, 1951, cited in Jones, 1999; Sohn, 1982). On the other hand, MFIs with an integrated approach usually define themselves as development institutions, with a clear social mission. In a more holistic vision, they consider that they have a role to play to ensure that access to financial services effectively lead to livelihood improvement for their clients. In addition to facilitating financial inclusion, these MFIs provide business development services and additional support programs. Such institutions are therefore more likely to consider that they also have a role, and even a responsibility, in promoting a sustainable, human development, respectful of the environment: What we look for in microfinance is the well-being of the community. […] We could not ensure this well-being in a segmented way. It has to be a global well-being, taking into account all aspirations, life harmony, in the environment where we are. Manager, MFI 10, Mali For me, microfinance is a means which should enable us to develop. And if today we want to develop in a responsible and sustainable way, I think we need to integrate the environmental component. Director, MFI 11, Mali Allet M. – Why do MFIs go green? – 14/12/2010 12 / 26 The integrated approach is not however in drastic opposition with the minimalist one. Indeed, MFIs that see a role for microfinance in environmental management usually call for partnerships with specialized, environmental organisations (NGOs or public entities). They do not question the functionalist argument, and, on the opposite, agree that they do not have all the skills and resources needed to tackle environmental issues on their own. Yet, contrarily to MFIs with a minimalist approach, these institutions identify both a responsibility and an opportunity (for themselves and for their clients) in environmental management: I am not saying that [microfinance] has the capacity. But, somehow, we have to find the capacity. […] It is only microfinance that touches the grassroots, that will actually interact with a vast proportion of the people. Now, that in itself is an opportunity. If we use this opportunity, we will be able to sensitize people and provide a kind of intervention that will ensure that environment is conserved. Director, MFI 16, Tanzania I have this social basis in this area, […] I know about microfinance. And the one who knows about sustainable development is someone else, another group, another association, another foundation. For me, we have to find social alliances, conventions, networks, so that we can start working on the issue through the groups and relations that we already have. Director, MFI 2, Mexico Overall, while MFIs with a minimalist approach define engagement in environmental management as a mission drift, MFIs with an integrated approach appear to consider that not addressing social and environmental issues would actually constitute the mission drift. There are thus very different standpoints from MFIs themselves on the role that microfinance should play regarding the environmental bottom line. Social expectations and stakeholders’ pressures As highlighted by Labie (2005), this type of controversial debates around mission definition is actually typical of non-profit organisations, which pursue several simultaneous objectives and have to define what are their priorities, what are the missions they want to handle themselves and the ones they would better leave to others. According to convention theory, in the absence of rationale calculation or precise contract that would help a stakeholder determine action, decisions to opt for a behaviour rather than another are influenced by the collective social norms in place (Labie, 2005). The Corporate Social Responsibility literature as well emphasizes that the decision to engage in Corporate Responsibility results from a complex Allet M. – Why do MFIs go green? – 14/12/2010 13 / 26 process related to the way individuals, organisations, the business world and society interpret the role of business in the society today (D’Amato & Roome, 2009). Social expectations and institutional pressures thus play a key role in shaping the vision on what would be the socially appropriate role of a business. One theoretical framework, often mobilized in the CSR literature as well as in some microfinance articles (Ashta & Hudon, 2009; Périlleux, 2008), explores in particular the influence of institutional pressures on organizational decision-making processes: stakeholder theory (Freeman, 1983, 1984). Stakeholder theory states that the behaviour of an organisation is conditioned by the pressures exercised on the organisation by different stakeholders (Baudry, 2003; Clarkson, 1995; Donaldson & Preston, 1995; Fineman & Clarke, 1996). If an organisation wants to gain social legitimacy, it thus has to satisfy social expectations and conform to the institutional pressures of relevant groups (Céspedes-Lorente, et al., 2003; Hemingway & Maclagan, 2004; Logsdon & Yuthas, 1997). If we apply this stakeholder analytical framework to the green microfinance phenomenon, we find out that today there are neither strong social expectations nor significant stakeholders’ pressures on MFIs to engage in environmental management. Indeed, on the one hand, some microfinance stakeholders are not aware yet of the potential role MFIs could play in tackling environmental issues and therefore do not exert any pressure regarding the appropriate role of microfinance in environmental management. This is the case of microfinance clients and employees. Microfinance clients are often little aware of the potential importance of the environmental risks linked to their activities and of the existence of alternative solutions that could help them enhance their productivity, reach new business markets and improve working conditions. Environmental management is moreover likely not to be perceived as a priority for microfinance clients who are poor and have other, more urgent issues to manage: Environment is just one issue. […] The poor people, what they need first, the basic, will be eating. Second will be home. Third will be education. Fourth will be something else. Environment is not the first priority for poor people. Manager, MFI 3, Indonesia Even if they were aware of the potentially negative impact of their activity and of possible solutions to mitigate this impact, it is hard to image that microfinance clients would spontaneously seek support from a financial institution not yet involved in green microfinance, when the problem is an environmental one. Similarly, if an MFI is not yet Allet M. – Why do MFIs go green? – 14/12/2010 14 / 26 involved in green microfinance, its employees are not prone to perceive that they have a role to play in promoting environmental management, and therefore they are not likely to exert explicit pressures on top managers for implementing environmental programs. On the other hand, some other microfinance stakeholders start considering that MFIs could be actors of environmental management, but they still put a low urgency on the issue. This is especially the case of investors and donors, rating agencies and governments. An increasing number of investors and donors are now adopting a triple bottom line approach in their funding policies. According to the Social Performance Indicators Survey realized by the Social Performance Taskforce in 2007, 62 per cent out of forty-five interviewed social investors expressed their interest in knowing the environmental performance of MFIs (De Bruyne, 2008). And the Microfinance Investment Vehicles (MIVs) Survey held by CGAP in 2009 revealed that 60 per cent of the seventy-eight participating MIVs ‘report ESG [Environmental, Social and Governance] information to their investors, and […] 41 per cent have environmental exclusions’ (CGAP, 2009). Peer-to-peer platforms, such as Kiva, are also starting to promote ‘green microentrepreneurs’ on their websites. The interest of some microfinance investors and donors in environmental issues thus exists and is quickly growing. However, it is not felt so strongly by all types of investors. International donors and socially responsible investors may be concerned with environmental issues, but it is not so much the case for more commercially-oriented investors or local banks. Besides, even the investors and donors that are showing interest in environmental performance do not seem yet to put a high priority on the issue. Some of them claim that they are still in the reflection process for the inclusion of environmental performance criteria. Some others have started to adopt environmental exclusion lists and reporting requirements, but MFIs, for the limited amount of investment they represent, usually fall below the limit set out for systematic environmental evaluation. As for the investors and donors that have developed environmental performance criteria and are asking MFIs to report on them, these criteria represent a relatively minor part of due diligence requirements, and they are generally not accompanied, in practice, by any real sanction, reward or technical assistance. Microfinance rating agencies are also beginning, although timidly, to look at the environmental performance of microfinance institutions. As part of their Social Performance rating products, PlaNet Rating, M-Cril and MicroFinanza have defined some specific indicators for assessing MFIs’ responsibility to the environment: existence of environmental policies, processes for assessing and screening environmental risks, processes for monitoring Allet M. – Why do MFIs go green? – 14/12/2010 15 / 26 client compliance, training and awareness-raising of staff, development of specific green microfinance projects (renewable energies, sustainable farming, sanitation), etc. Nonetheless, the level of importance that rating agencies give to environmental performance still remains low as well. Indeed, environmental performance indicators are not always clearly defined, and their evaluation is usually quite brief, leading to a maximum of one or two short paragraphs, at the very end of rating reports. Their weight in the total rating grade appears as marginal. Furthermore, environmental performance is only measured so far as part of Social Performance ratings, which, as we know, have only been developing recently and still remain secondary in the microfinance rating industry. As for governments, some of them have started to express an interest in promoting green microfinance, may it be through the adoption of specific regulations (Burkina Faso) or incentive mechanisms (Bangladesh). MFIs indeed have the advantage of being embedded in their local areas of intervention: they have developed extensive networks, and have frequent and direct contacts with thousands of microentrepreneurs. As financial institutions, they constitute key stakeholders in a business and their capacity to influence the decision making and management practices of this business should not be underestimated (Coulson & Dixon, 1995; Van Gelder, 2006). This actually places them in a better position than national authorities, which can difficultly regulate the environmental behaviour of the disseminated and widely informal micro-businesses. In a context of growing concerns about climate change, governments that are implementing environmental protection policies can therefore be interested in piggybacking on MFIs’ networks for the enforcement of environmental standards or the promotion of environmentally-friendly technologies and practices (Hall, et al., 2008): In Burkina, there are laws on environment protection, and these laws say: ‘Here are the activities that you should not conduct because it destroys the environment.’ So, at the time of financing, we have to respect these laws. We look whether these activities that [the client] wants to conduct do not fall into the activities that destroy the environment. If it is the case, we do not finance. Director, MFI 8, Burkina Faso There are however very few countries today that have adopted national regulations or policies that would effectively tackle the issue of environmental management by financial institutions. And when there are specific regulations regarding environmental risk management for SMEs Allet M. – Why do MFIs go green? – 14/12/2010 16 / 26 and microenterprises, there is usually little enforcement and the decision to abide by them still depends more on the own willingness of MFIs. Analysis based on a stakeholder approach thus reveals that today, microfinance stakeholders do not have yet high expectations regarding MFIs’ role in managing environmental issues. A certain number of governments that have adopted specific regulations or policies, and some donors or investors that are particularly committed to environmental protection may be influencing MFIs to go green. But such types of pressures turn out to be scarce for the moment, and they are very seldom mentioned by interviewed managers as determining their engagement in green microfinance so far. Nevertheless, our study reveals that MFIs’ managers somehow feel that they are expected not to dismiss the environmental issue. As it could be observed in our interviews, some MFIs’ managers are already adapting their discourse regarding environmental issues: they integrate the terms of ‘sustainable development’ or ‘environmentally-friendly practices’ in their language to describe their policy orientation, even when in practice no real action is undertaken to reach an environmental bottom line. Some other interviewed managers that are not involved in green microfinance also showed a tendency to minimize the extent of their clients’ impact on the environment. This reveals that they are aware of social expectations in favour of environmental management, and that they feel the need to justify their lack of involvement on this issue, in order not to lose their social legitimacy. Where does this perception come from, if not from microfinance stakeholder pressure? No collective social norm clearly defines yet what role would be appropriate for microfinance regarding the environmental bottom line. But the microfinance industry has a specificity in that, in addition to its financial bottom line, it is strongly expected to fulfill a social mission. In recent years, the microfinance community has put a strong focus back on microfinance clients’ needs and interests, by promoting social performance and client protection practices. More than in other industries, MFIs’ managers are thus compelled to consider and respond to their clients’ needs. In a context of growing concerns regarding climate change and sustainable development, MFIs are increasingly likely to consider that environmental risks are intricately related to economic and social impacts for their clients. In consequence, managers may perceive that they should take these environmental risks into account if they want to satisfy expectations regarding their social mission. Allet M. – Why do MFIs go green? – 14/12/2010 17 / 26 Moreover, MFIs’ managers may already feel compelled to integrate environmental issues (at least in their discourses) because new expectations have been created with the engagement of some pioneer MFIs in green microfinance. In the literature on Corporate Social Responsibility, several authors highlight that engagement in CSR is crucially influenced by processes of sense-making, which are co-created through the interactions of organizational and social stakeholders (López Rodriguez, 2009; Preuss & Córdoba-Pachon, 2009). CSR is then defined as ‘an embedded process that is both a product and a generative mechanism’ (D’Amato & Roome, 2009). The idea here is that interactions with other stakeholders will lead an organisation to engage in CSR, and the engagement of that organization will in turn influence others to engage. The same constructivist process can also happen in green microfinance: little by little, a phenomenon of mimetic behaviour is creating sense around the environmental engagement of MFIs and shaping the vision on what is the appropriate role of the industry. However, this process is still far from having reached a consensus. And our study reveals that today, the strategic decision to go green still depends essentially on the vision and positioning of individual managers. The key role of the environmental champion Similarly to what is emphasized in the literature on Corporate Social Responsibility (Hemingway & Maclagan, 2004; Logsdon & Yuthas, 1997; Maon, et al., 2009), leadership turns out to be the strongest determinant for engaging in green microfinance hitherto. As few MFIs make explicit the relative weight they attach to their different goals, or their ranking, it indeed leaves managers with important strategic room for maneuver (Copestake, et al., 2005). Results from our qualitative study show that pioneer MFIs that are currently implementing green microfinance programs are MFIs with strong leaders who were ready to engage in environmental issues. Interestingly, these leaders were not necessarily active ecologists. But they were somewhat concerned with the environmental risks of their clients and, when an opportunity aroused, they were not afraid to innovate and set up new management procedures within their institutions. Literature on CSR often points to a set of individual characteristics that can explain why some managers have a proactive posture in implementing Corporate Social Responsibility: they are usually managers with a propensity for change, a taste for innovation and search of new opportunities, an ability for holism, a long term vision, a capacity to anticipate problems, the willingness to develop new models, an ability to network and use multiple sources of information, a strong commitment and perseverance, and an ability to extend their vision to Allet M. – Why do MFIs go green? – 14/12/2010 18 / 26 the board, managers and employees of their institution (Aragón-Correa & Rubio-López, 2007; D’Amato & Roome, 2009; Husillos & Álvarez-Gil, 2008; Nidumolu, et al., 2009). The same holds for green microfinance. Pioneer managers that drove their institution into environmental management appear to be individuals with a holistic vision, who have integrated the concept of sustainable development, where economic, social and environmental issues are all intricately related. They therefore see a clear opportunity both for their clients and for their institution in addressing a triple bottom line: As long as the environment is not sustainable, my clients are not going to be sustainable, and the institution is not going to be sustainable. I know their livelihood is more affected by nature than by the policy of my government. […] So this is simply business practice, a good business practice to help them to find out a way to better manage their relationship with the environment. Director, MFI 4, Ethiopia Results from our interviews also confirm that these pioneer managers are individuals with a longer-term vision and with taste for innovation, which makes them more likely to perceive the economic opportunities that can be fostered by green microfinance: I would not like to be a microfinance network like any other. I told myself that the bet that we need to win is to take actions heading towards a sustainable and responsible development. […] I think that in terms of competition, we will be one step ahead. It is a plus for us. […] We are designing a model today. Director, MFI 11, Mali Individual characteristics are essential factors to explain why MFIs go green, but it is important to realize that there is no determinism in who can be an environmental champion. As highlighted in the literature on CSR, organizational leadership also emerges through a cocreation process (D’Amato & Roome, 2009; López Rodriguez, 2009). As MFIs increasingly get involved in green microfinance, interactions will foster sense-making and knowledgecreation, and progressively lead to the emergence of new environmental champions within MFIs. The triggering factor: access to technical expertise The literature on CSR sometimes emphasizes that a main determinant for involvement in CSR is the economic situation of the business (Elijido-Ten, 2007). As previously mentioned, the grey literature on green microfinance also highlights that financial cost can be a main constraint for the development of green microfinance programs (Araya & Christen, 2002; Allet M. – Why do MFIs go green? – 14/12/2010 19 / 26 Coulson & Dixon, 1995; Hall, et al., 2008; Wenner, 2002). Of course, a solid financial situation is essential. An MFI will not launch any type of program or innovation if it is not financially healthy, because it will have other priorities. But some environmental actions do not necessarily require lots of funding, and MFIs can choose a strategy along available resources. Furthermore, environmental champions are usually leaders capable of mobilizing additional funding if needed. And as investors and donors’ interest increase, one can expect growing opportunities to get funding for environmental management projects. What comes out of our study as a more constraining factor today is rather access to knowledge and technical expertise. Indeed, engaging in green microfinance implies management innovation. Screening and monitoring loans along environmental criteria, tailoring financial products to promote environmentally-friendly technologies and practices, or developing environmental, non-financial services, all require acquiring specific technical skills and setting up new management procedures (Wenner, 2002). Even when MFIs’ managers find a latent interest in the environmental topic, even when they consider that they would have a role to play, and even when, as environmental champions, they would be ready to engage and push the issue forward within their institution, they often express that they lack the knowledge and technical skills to translate this interest into practice: There is a trend that is propping up the issue, and I think that in the microfinance sector we could do something. But we lack orientation, we lack orientation. Director, MFI 2, Mexico Today, pioneer institutions engaged in green microfinance are always the ones that were able to mobilize technical assistance from external partners (donors, NGOs, consulting companies, etc.): We didn’t know how to approach the subject. And the reason we got there sort of 4 years ago, is because our partners […] began also getting involved in that area. They brought a big support and expertise to start working in this area. Director, MFI 6, Kenya Access to technical expertise regarding green microfinance is still a limiting factor for MFIs’ environmental engagement today. However, as initiatives in this area multiply, knowledge is being created through a learning-and-sharing process, therefore progressively reducing the technical barriers that can prevent MFIs from going green today. Allet M. – Why do MFIs go green? – 14/12/2010 20 / 26 CONCLUSION In recent years, green microfinance has started to emerge as a new phenomenon, based on the objective to reach a triple bottom line. The issue has still been little explored, but its potential development may be significant in the near future. Before further advocating for specific green microfinance strategies and actions, it is essential today to ask whether such an approach would be relevant. The objective of this article was to provide some insights on this issue, by identifying why microfinance institutions decide to engage in environmental management. Existing literature in green microfinance usually recognizes two types of theoretical rationales for MFIs to go green (ethical and instrumental), but does not provide any empirical insight on the actual determinants guiding MFIs’ decision-making process. Basing our analysis on the results of a qualitative study and on the mobilization of organizational decision-making theories from the Corporate Social Responsibility literature, we found out that the decision to engage in green microfinance actually results from more complex processes. Our study first revealed that MFIs’ managers are overall aware that their clients are concerned with environmental issues and that such risks should be mitigated to achieve a sustainable, human development. However, not all managers consider that microfinance has a role to play in that sense. Stakeholder analysis enabled us to identify that there are no strong social expectations or institutional pressures from microfinance stakeholders hitherto concerning the role that microfinance should play in tackling this environmental bottom line. The positioning of the microfinance industry regarding the environmental issue is still controversial: some MFIs managers consider it as a mission drift, when for others it constitutes an integral part of their social mission and financial objectives. In the absence of prevailing social norms, the decision to engage in green microfinance still depends more on the perceptions of individual managers. Our study indeed revealed that, today, MFIs that decide to go green are institutions where leaders act as environmental champions who promote a sustainable development vision and an integrated approach, who see green microfinance as an opportunity and are not afraid to innovate, and who manage to have access to the needed technical expertise and resources. So far, many pioneer MFIs are engaging in green microfinance proactively, because they identify a need at the level of their clients. For many leaders, this engagement is felt as an ethical one, to fulfill their social mission, their responsibility towards the society, with a long term vision of sustainable development. However, in a context of growing interest regarding Allet M. – Why do MFIs go green? – 14/12/2010 21 / 26 environmental protection and sustainable development, MFIs may feel increasingly pressurized to integrate an environmental bottom line. Pressures may be exercised directly by powerful stakeholders such as donors, investors, rating agencies and governments. They may also come more pervasively, as mimetic behaviours and processes of sense-making progressively define what should be the role of the microfinance industry regarding environmental issues. The risk then is that MFIs engage in environmental management by mere compliance to institutional pressures or social expectations, without putting clients’ interests at the heart of their approach, which entails a risk of inefficiency or even of adverse social effect. The CSR literature indeed emphasizes that, when Corporate Social Responsibility is viewed as a constraint, there is a high risk that the organisation implements incongruent or counterproductive CSR programs, which produce no social value and even hurt core strategic objectives (Mostovicz, et al., 2009). When talking about Social Performance of MFIs, Copestake, et al. (2005) also argue that social performance is most successfully implemented when there is an internal buy-in of the importance of the issue (may it both for social and financial reasons), and that external demand for Social Performance may actually inhibit internal ownership. The same scenario could apply to green microfinance. Green microfinance encompasses a diversity of strategies, and some of these strategies could potentially entail important economic and social trade-offs for microfinance clients (risk of exclusion, imposition of inadequate requirements, etc.). MFIs that engage in green microfinance in a mere reactive posture may not adopt the most relevant policies. The risk indeed is that these MFIs start implementing some quickly-designed, one-size-fits-all, green(washing) strategies, that at best will turn out ineffective to reach an environmental bottom line, and at worst, will entail some counterproductive economic, social and environmental effects. This article sought to identify factors influencing MFIs’ decision to engage (or not) in green microfinance, and did not assess the actual effectiveness of green microfinance programs. But the present controversy over the positioning of microfinance indeed points to a very acute question: what should be the role of microfinance in managing environmental issues? Can MFIs effectively reach an environmental bottom line? To what extent and how can they influence environmental behaviours? And what could be the economic, social and environmental costs and benefits of the different types of green microfinance programs? Not only do all these issues call for further investigation in order to really understand the stakes at play around green microfinance. They also emphasize the responsibility of Allet M. – Why do MFIs go green? – 14/12/2010 22 / 26 microfinance stakeholders to avoid rushing into the environmental bottom line issue without engaging a real reflection regarding the adequacy of objectives and means of green microfinance strategies. REFERENCES Araya, M.C. & Christen, R.P. (2004) ‘Microfinance as a tool to protect biodiversity hot-spots’. Washington DC: CGAP Aragón-Correa, J. & Rubio-López, E. (2007) ‘Proactive corporate environmental strategies: myths and misunderstandings’. Long Range Planning 40: 357-381 Armendariz, B. & Szafarz, A. (2009) ‘On mission drift in microfinance institutions’. CEB Working Paper N°09/015, Bruxelles: Centre Emile Bernheim Ashta, A. & Hudon, M. (2009) ‘To whom should we be fair? Ethical issues in balancing stakeholder interests from Banco Compartamos case study’. CEB Working Paper N°09/036, Bruxelles: Centre Emile Berheim Baudry, B. (2003) Economie de la firme (Economics of the firm). Paris: Repères-La Découverte Benjamin, C. & Wilshusen, P. (2007) Reducing poverty through natural resource-based enterprises: learning from natural product value chains. Washington DC: USAID Blackman, A. (2000) ‘Small is not necessarily beautiful. Coping with dirty microenterprises in developing countries’. Resources 141: 9-13 Borge Johannesen, A. (2004) ‘Designing integrated conservation and development projects (ICDPs): illegal hunting, wildlife conservation and the welfare of the local people’. Working Paper Series No. 2/2004, Department of Economics, Norwegian University of Science and Technology BRAC (2006) ‘Environmental assessment of SMEs of BRAC Bank’. Dhaka: BRAC Castelo Branco, M. & Lima Rodrigues, L. (2006) ‘Corporate Social Responsibility and resource-based perspectives’. Journal of Business Ethics 69: 111-132 Céspedes-Lorente, J, De Burgos-Jiménez, J. & Álvarez-Gil, M.J. (2003) ‘Stakeholders’ environmental influence. An empirical analysis in the Spanish hotel industry’. Scandinavian Journal of Management 19: 333-358 CGAP (2009) ‘MIV Performance and Prospects: Highlights from the CGAP 2009 MIV Benchmark Survey’. CGAP Brief, September 2009, Washington DC: CGAP Chowdury, J. (2008) ‘Microfinance and Environment: does the participation in the microcredit based social forestry of Proshika in Bangladesh improve environmental literacy?’. Centre for Microfinance and Development Working Paper 5, University of Dhaka Clarkson, M. (1995) ‘A stakeholder framework for analyzing and evaluating corporate social performance’. The Academy of Management Review 20(1): 92-117 Copestake, J., Greeley, M., Johnson, S., Kabeer, N. & Simanowitz, A. (2005) Money with a mission. Microfinance and poverty reduction. London: Intermediate Technology Publications Allet M. – Why do MFIs go green? – 14/12/2010 23 / 26 Coulson, A. & Dixon, R. (1995) ‘Environmental risk and management strategy: the implications for financial institutions’. The International Journal of Bank Marketing 13(2): 22-29 D’Amato, A. & Roome, N. (2009) ‘Leadership of organisational change. Towards an integrated model of leadership for corporate responsibility and sustainable development: a process of corporate responsibility beyond management innovation’. Corporate Governance 9(4): 421-434 De Bruyne, B. (2008) ‘Summary of social performance indicators survey’, in ‘The role of investors in promoting social performance in microfinance’, pp. 25-31. European Dialogue, 1, Luxemburg: European Microfinance Platform, Donaldson, T. & Preston, L. (1995) ‘The stakeholder theory of the corporation: concepts, evidence, and implications’. The Academy of Management Review 20(1): 65-91 Elijido-Ten, E. (2007) ‘Applying stakeholder theory to analyze corporate environmental performance: evidence from Australia listed companies’. Asian Review of Accounting 15(2): 164-184 Fineman, S. & Clarke, K. (1996) ‘Green stakeholders: Industry interpretations and response’. Journal of Management Studies 33: 715-730 FMO (2008) ‘Environmental and social risks management tools for MFIs’. Available on FMO’s website: www.fmo.nl/smartsite.dws?id=531 Freeman, R.E. (1983) ‘Strategic Management: A Stakeholder Approach’. Advances in Strategic Management 1: 31-60. Freeman, R. E. (1984) Management: A stakeholder approach. Boston: Pitman GreenMicrofinance (2007) ‘Microfinance and the environment: setting the research and policy agenda’. Roundtable May 5-6, 2006. Philadelphia: GreenMicrofinance-LLC Hall, J. & Lal, A. (2006) ‘How MFIs and their clients can have a positive impact on the environment’. Paper prepared for the 2006 Microcredit Summit, Philadelphia: GreenMicrofinance-LLC Hall, J, Collins, L., Israel, E. & Wenner, M. (2008) ‘The missing bottom line: Microfinance and the Environment’. Philadelphia: GreenMicrofinance-LLC Hemingway, C. & Maclagan, P. (2004) ‘Managers’ personal values as drivers of CSR’. Journal of Business Ethics 50: 33-44 Herrold-Menzies, M. (2006) ‘Integrating conservation and development: what we can learn from Caohai, China’. The Journal of Environment Development 15(4): 382-406 Hudon, M. (2009) ‘Should access to credit be a right?’. Journal of Business Ethics 84(1): 17-28 Husillos, J. & Álvarez-Gil, M.J. (2008) ‘A stakeholder-theory approach to environmental disclosures by small and medium enterprises (SMEs)’. Revista de Contabilidad - Spanish Accounting Review 11(1): 125-156 Jones, M. (1991) ‘Ethical decision making by individuals in organizations: an issue-contingent model’. The Academy of Management Review 16(2): 366-395 Jones, M. (1999) ‘The institutional determinants of social responsibilities’. Journal of Business Ethics 20:163-179 Kaushal, K.K. & Kala, J.C. (2005) ‘Nurturing Joint Forest Management through Microfinance. A case from India’. Journal of Microfinance 7(2): 1-12 Allet M. – Why do MFIs go green? – 14/12/2010 24 / 26 Labie, M. (2005) ‘Comprendre et améliorer la gouvernance des organisations à but non lucrative : vers un apport des tableaux de bord ?’(How to understand and improve the governance of non-profit organizations). Gestion, 30(1) Logsdon, J. & Yuthas, K. (1997) ‘Corporate Social Performance, stakeholder orientation, and organizational moral development’. Journal of Business Ethics 16: 1213-1226 López Rodriguez, S. (2009) ‘Environmental engagement, organisational capability and firm performance’. Corporate Governance 9(4): 400-408 Maon, F., Lindgreen, A. & Swaen, V. (2009) ‘Designing and implementing Corporate Social Responsibility: an integrative framework grounded in theory and practice’. Journal of Business Ethics 87: 71-89 Mbile, P. et al. (2005) ‘Linking management and livelihood in environmental conservation: case of the Korup National Park Cameroon’. Journal of Environmental Management 76: 1-13 Mitchell, R.K., Agle, B.R., & Wood, D.J. (1997) ‘Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts’. Academy of Management Review 22(4): 853-886 Morris, E., Winiecki, J., Chowdury, S. & Cortiglia, K. (2007) ‘Using microfinance to expand access to energy services’. Washington DC: The SEEP Network Mostovicz, I., Kakabadse, N. & Kakabadse, A. (2009) ‘Corporate social responsibility: the role of leadership in driving ethical outcomes’. Corporate Governance 9(4): 448-460 Nidumolu, R., Prahalad, C. & Rangaswami, M. (2009) ‘Why sustainability is now the key driver of innovation’. Harvard Business Review, September 2009: 3-10 Pallen, D. (1997) ‘Environmental sourcebook for microfinance institutions’. Canadian International Development Agency Périlleux, A. (2008) ‘Les coopératives d’épargne et de crédit en microfinance face aux problématiques de gouvernance et de croissance’ (Microfinance credit and savings cooperative confronted to governance and growth issues). CEB Working Paper N°08/025, Bruxelles: Centre Emile Bernheim Pikholz, L. et al. (2005) ‘Institutional and product development risk analysis toolkit’. Nairobi: MicroSave. Available online: www.microsave.org PlaNet Rating (2007) ‘Social Performance Rating’. Saint-Ouen: PlaNet Rating Pratt, M. (2009) ‘For the lack of a boilerplate: tips on writing up (and reviewing) qualitative research’. Academy of Management Journal 52(5): 856-862 Preuss, L. & Córdoba-Pachon, J.R. (2009) ‘A knowledge perspective on corporate social responsibility’. Corporate Governance 9(4): 517-527 Redmond, J., Walken, E. & Wang, C. (2008) ‘Issues for small business with waste management’. Journal of Environmental Management 88: 275-285 Rippey, P. (2009) ‘Microfinance and climate change: threats and opportunities’. CGAP Focus Note 53, Washington DC: CGAP Allet M. – Why do MFIs go green? – 14/12/2010 25 / 26 Roe, D. (2003) ‘The Millennium Development Goals and natural resources management: reconciling sustainable livelihoods and resource conservation or fuelling the divide?’, in ‘The Millennium Development Goals and Local Processes: Hitting the target or missing the point?’. London: IIED Schuite, G.J. & Pater, A. (2008). ‘The triple bottom line for microfinance’. Bunnik: Triodos Facet SEEP Network Social Performance Working Group (2008) ‘Microfinance and the Environment’, in ‘Social Performance Map’. Washington DC: The SEEP Network Servet, J.M. (2006) Banquiers aux pieds nus. Paris: Odile Jacob Sohn, H. (1982) ‘Prevailing rationales in the Corporate Social Responsibility debate’. Journal of Business Ethics 1: 139-144 Triodos Facet (2009) ‘Risk management and sustainability management. A handbook for microfinance practitioners’. Bunnik: Triodos Facet UNEP-FI (2006) Sustainability management and reporting. Benefits for developing countries and emerging economies. Geneva: United Nations Environment Programme Finance Initiative USAID (2008) ‘Microfinance and climate change: can MFIs promote environmental sustainability?’. Online speaker’s corner, 18-20 November 2008, hosted on www.microlinks.org Van Elteren, A. (2007) ‘Environmental and social risk management and added value at MFIs and MFI funds – the FMO approach’. The Hague: Netherlands Development Finance Company (FMO) Van Gelder, J-W. (2006) ‘The dos and don’ts of sustainable banking. A Banktrack manual’. Utrecht: BankTrack Wenner, M. (2002) ‘Microenterprise growth and environmental protection’. Microenterprise Development Review 4(2): 1-8 Wenner, M., Wright, N., & Lal, A. (2004) ‘Environmental protection and microenterprise development in the developing world. A model based on Latin American experience’. Journal of Microfinance 6(1): 95-122 Wild, R., Millinga, A. & Robinson, J. (2008) ‘Microfinance and environmental sustainability at selected sites in Tanzania and Kenya’. LTS International, CARE, WWF Zutshi, A. & Sohal, A. (2004) ‘A study of the environmental management system (EMS) adoption process within Australasian organisations. Role of stakeholders’. Technovation 24: 371-386 Allet M. – Why do MFIs go green? – 14/12/2010 26 / 26