IFC's Sustainable Investing product aims to leverage IFC's track record in investing sustainably to influence and enable capital market stakeholders to better integrate sustainability into the capital allocation and portfolio management processes in emerging markets.

The goal of the product is to further increase sustainable capital flows to emerging markets. As of 2008, an estimated US $50 billion of capital flows to emerging markets is labeled sustainable with integration of environmental, social and governance criteria into the investment process. Still, that accounts for just about 2% of total investments in emerging markets. Over 80% of asset owners and asset managers believe that social and environmental issues will grow in importance over the next three years.

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IFC supports the growth of sustainable capital flows to emerging markets by funding the development of enhanced stock market indices, financial instruments, and market research and training and by sharing IFC's substantial experience in incorporating environmental and social (E&S) issues when investing in these markets. Our objectives are to:

• Develop the market infrastructure to support the growth of sustainable investment in emerging markets
• Improve the quality of E&S integration into the investment process through the development of commonly accepted investment standards, frameworks and methodologies
• Promote capital market reform to support engagement between asset owners and companies on sustainability issues

What is Sustainable Investing?

The consideration of environmental sustainability, social responsibility and corporate governance (ESG) into the investment process has many names, including socially responsible investing and green investing. For the purposes of IFC, this practice is known as sustainable investing (SI). Sustainable investing integrates ESG factors into investment analysis, stock selection and active ownership practices in the belief that these factors can improve long- term risk management.