Enhancing the sustainability of private investment in emerging markets is part of IFC’s commitment to development, and increasingly a strategic priority for business development. IFC Executive Vice President Peter Woicke notes, “For IFC to be a partner of choice for investment in the private sector of emerging markets, we must offer more than capital.”
In this context, IFC has just released its second annual Sustainability Review. The 2003 review explains how IFC is making its environmental and social resources available to clients, highlighting activities in such wide-ranging areas as carbon emissions trading, biodiversity, energy conservation, and HIV/AIDS awareness.
Measuring Sustainability at IFC
IFC has developed a methodology to identify ex ante, at inception, projects that have positive impact for a community or nation beyond profitability, job creation, tax revenues, and compliance with basic environmental and social standards and safeguards. In FY03, the second year that the Corporation has tracked its results, the percentage of projects expected to have such positive impact increased by 9.1 percent, to 56.4 percent.
IFC projects can be high impact on the basis of performance in economic development, corporate governance and environmental management, environmental impact, and social impact. Performance across all these components of sustainability rose significantly over FY02. An example of such a high impact project is Villa Shipping in the Maldives, where the client’s business is not only boosting local economic development but also helping protect the environment through shoreline protection, coral reef monitoring, wastewater treatment, and sea turtle conservation programs. IFC also uses high impact project tracking to assess the performance of its investment departments.
Facts and Data
The 2003 Sustainability Review also offers data on the number of hours devoted to environmental and social appraisal and supervision of investments, the number of staff hours devoted to training on environmental and social issues, and the growth in staffing and budget for the environmental and social function within IFC. Over time, the Corporation has established a network of private-sector oriented environmental and social specialists that, in its scale and expertise, is unique in the financial and development communities.
The Equator Principles
Mr. Woicke observes, “We recognize our expertise in environmental and social areas as a major source of differentiation for us in the marketplace.” A major example of this is the Corporation’s key advisory role in the Equator Principles, a set of environmental and social guidelines, modeled on those of IFC and the World Bank, that ten commercial banks adopted in June 2003. As of September, six more banks have signed on, and others are expected to soon. Collectively, these banks are estimated to account for more than 70 percent of the worldwide project loan market.
IFC's Sustainability Review is available on-line in pdf format at:
http://www1.ifc.org/ar2003/pdfs/IFCSus_Review2003.pdf
To order a copy of the publication please contact:
Corporate Relations Unit
International Finance Corporation
2121 Pennsylvania Avenue, NW
Washington, DC 20433 USA
Phone: (202) 473-7711
Fax: (202) 974-4384
