According to a new CGAP paper, fund managers reveal significant efforts on the part of microfinance investment funds to include environment, social, and governance (ESG) considerations in their investment policies, due diligence, and monitoring.

The second Banana Skins Report on microfinance shows a sharp change in risk factors, with last year's concerns about governance taking a back seat to credit and liquidity issues thanks to the financial crisis. Xavier Reille says such a sharp shift is not totally warranted, and believes microfinance is more resilient than the banking sector.

More and more, MFIs want to be both financially and socially accountable. CGAP, together with its partners, is honoring those institutions, recently giving out the first ever Social Performance Reporting Awards. These awards recognize transparency in social performance reporting as the critical first step in achieving social performance goals.