Sustainability Financial Sustainability
BY MANAGING RISKS AND EFFECTIVELY USING OUR FINANCIAL RESOURCES, WE REMAIN FINANCIALLY SUSTAINABLE AND MAXIMIZE OUR DEVELOPMENT IMPACT.
Sound risk management plays a crucial role in ensuring IFC’s ability to fulfill our development mandate. The very nature of IFC’s business, as a long-term investor in dynamic yet volatile emerging markets, exposes us to financial and operational risks.
Prudent risk management and a solid capital position enable us to preserve our financial strength and play a countercyclical role during times of economic and financial turmoil. In addition, IFC’s financial strength results in low borrowing costs, allowing us to provide affordable financing to our clients.
The soundness and quality of IFC’s risk management and financial position can be seen in our triple-A credit rating, which has been maintained since coverage began, in 1989.
Our thorough approach to risk management includes:
- Rigorous and conservative capital adequacy, using more demanding standards than are required to maintain a triple-A credit rating;
- Conservative portfolio diversification guidelines by company, sector, and region; and
- Credit risk assessments and integrity due diligence for all investments.
Fostering Sustainable Development
Having a sound risk-management practices is also crucial to our clients across emerging markets, to ensure their long-term viability and competitiveness. Sustainable businesses generate jobs and create long-term opportunities for millions to escape poverty and improve their lives.
In addition to evaluating our clients’ environmental, social, and governance practices, IFC evaluates their financial risk management capabilities. We also offer risk-management products, or derivatives, to enable clients to hedge their interest rate, currency, or commodity price exposures.