IFC Response to CAO Audit of Sample of IFC Investments in Financial Intermediaries
We are happy to note that the CAO report finds a 90 percent success rate regarding the adoption of IFC’s policy requirements by clients. We believe that the 2012 update of IFC’s Sustainability Framework has helped further improve effective risk management and transparency and the steps we have taken to strengthen our environmental and social capacity and focus on FIs since 2006 is paying off.
Working with financial intermediaries allows IFC to support far more micro, small, and medium enterprises than we would be able to on our own. In 2011, our financial-intermediary clients helped us provide 20 million individual and micro-loans as well as 3.3 million loans.
IFC believes that sound, inclusive, and sustainable financial markets are essential to ending extreme poverty and building shared prosperity. Our work with financial intermediaries in more than 120 countries has helped strengthen financial institutions and overall financial systems, enabling them to play a constructive role in economic growth.
We recognize that we can do more—and are working to strengthen our development impact and our approach to environmental and social risk management. We are pleased that the CAO report recognizes the leading role that IFC is playing in strengthening environmental and social sustainability among financial institutions. For that reason, we believe we must deepen our work with financial intermediaries that share our values to address the most pressing development challenges. We look forward to working with the CAO and other stakeholders on further improvements.
IFC’s approach to environmental and social risk management helps build the capacity of our financial-institution clients to assess and mitigate their own E&S risks, in line with IFC’s Performance Standards. Our 2012 update to the IFC Sustainability Framework has strengthened our risk management and transparency with regard to our financial-institution clients.