Sustainable Finance integrates financial, social, and environmental considerations into decision making, facilitating improved risk management and higher return on investment.

Financial institutions can potentially be affected by social and environmental issues through the operations of their clients. Social and environmental issues within a financial institution's portfolio may translate into business risks for the financial institution.

There are three types of risk a financial institution could be exposed to arising from the social and environmental issues of their clients: credit risk, liability risk and reputational risk.

Financial institutions can effectively manage the risks presented by environmental and social issues in their portfolio through the implementation of a Social and Environmental Management System (SEMS).

An SEMS is a systematic framework to integrate environmental and social considerations into an organization's business processes.

All IFC clients are required to develop and implement an SEMS as a covenant of the loan/investment agreement.

This website aims to provide FI clients with the resources, tools, and guidance necessary to implement a successful SEMS.

Tools, Guidance and Other Resources

To view IFC tools, guidance and resources relevant to your organization, select the type of institution from the list below.

• Commercial Bank (including resources for Leasing and Microfinance)
• Private Equity Fund