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Annual Report

Promoting Environmental and Social Best Practices

India's Rural Women

Private enterprises are increasingly adopting IFC’s environmental and social standards.

IFC’s development impact is greatest when our clients operate sustainable businesses. Our Sustainability Framework helps them do just that. It promotes sound environmental and social practices, broadens our development impact, and encourages transparency and accountability.


This year—after an 18-month consultation process with stakeholders— we updated the Sustainability Framework to reflect the rapid evolution in best practices for sustainability and risk mitigation. The update addresses challenging issues such as supply-chain management, climate change, and business and human rights. Key changes include:

  • Reducing the threshold for clients to report greenhouse emissions—from the equivalent of 100,000 tons of carbon dioxide per year to just 25,000 tons. This will allow IFC to better understand the footprint of our portfolio and expand the scope of our energy-efficiency analysis.

  • Addressing human trafficking and forced evictions, and allowing communities’ continued access to cultural heritage sites on purchased land.

  • Ensuring more robust consultations for projects with potentially adverse effects on indigenous peoples through the principle of “Free, Prior, and Informed Consent.”

  • Expanding requirements for clients with regard to sensitive habitats.

  • Increasing transparency—namely, through our Access to Information Policy as regards the environmental and social performance and development impact of IFC’s projects and investments, including with financial intermediaries and in advisory services.


The Sustainability Framework’s influence extends beyond IFC. Our Performance Standards, which define clients’ responsibilities for managing environmental and social risks, are the basis for the Equator Principles, a voluntary risk-management framework used by 71 financial institutions worldwide.


Increasingly, companies are incorporating these standards into their policies and investors are viewing them as an indication of quality. In addition, 15 European development finance institutions and 32 export credit agencies from countries belonging to the Organisation for Economic Co-operation and Development refer to the Performance Standards in their operations. Governments now use IFC’s Standards as a reference point in their policy guidance. Bangladesh, Canada, China, Norway, and Vietnam, to name a few, refer or plan to refer to IFC Standards in an effort to guide companies—particularly those in the financial and extractive sectors—toward sustainability.





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