The microfinance sector has paid little attention to its environmental bottom line so far. Little measurement mechanisms have been put in place to assess MFI’s progress in addressing environmental issues. Yet, like any other stakeholder, microfinance institutions have a responsibility towards the environment. On the one hand, MFIs can contribute to environmental degradation if they support microenterprises that are harmful to the environment. On the other hand, they can have a positive impact on the environment if they support the development of environmentallyfriendly activities and access to clean technologies. Because they are poor and engaged in small-scale activities, microfinance clients are often believed not to have a significant impact on the environment. This may be broadly true for microentrepreneurs in trade and service activities. However, many studies prove that some small-scale activities entail high environmental risks, in terms of pollution (chemical use, soil and water contamination, etc.) or unsustainable use of natural resources (deforestation, soil degradation, overexploitation, etc.). This is the case, for instance, for leather tanning, metal working, electroplating, mining, painting, printing, textile dyeing, brick and tile making, charcoal making, crop growing, animal husbandry, fisheries, etc. These environmental risks can have a significant cumulative effect at the local level. More importantly, they represent direct threats to the health and livelihood of microentrepreneurs and surrounding populations. In many cases, solutions to mitigate these risks do exist, but microentrepreneurs do not apply them for lack of awareness or lack of financial resources. Today, an increasing number of MFIs and microfinance stakeholders are aware that their impact on the environmental is not neutral. In a survey conducted with 160 MFIs in 2011, 79% of respondents indeed consider that they have a role to play in protecting the environment. Beyond financial and social objectives, we now start talking about a “triple bottom line” in microfinance, a microfinance that could be “green”. The issue is being discussed in specific roundtables organized in major international microfinance events, such as the European Microfinance Week (2009, 2010 and 2011), as well as in practitioners’ workshops, such as the “Microfinance & Energy” workshop organized on the 2nd of November 2011 during the last European Microfinance Week.
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