Focus Area

Sustainability, Green and Impact Syndications

Financial institutions are responding to the demands of their clients and shareholders to increase allocations to investments that deliver positive social, environmental, and economic impact. A growing number of market participants have begun to embed environmental, social and governance (ESG) standards into their lending decisions.

Through our syndications program, lenders can leverage IFC’s sustainability standards, impact measurement framework, and product structuring expertise to gain access ESG-focused opportunities. We presently support a range of different ESG approaches:​ 

  • Green loans: IFC contributed to the development of the Green Loan Principles (GLP), published in 2018 by the Loan Market Association, the Asia Pacific Loan Market Association and the Loan Syndications and Trading Association. The GLP are a set of voluntary guidelines that seek to provide clarity and consistency on what constitutes a green loan based primarily on use of proceeds as described in financing documents. IFC supports efforts by its borrowers to meet GLP requirements, benefitting all members of a lending syndicate.
  • Sustainability-linked loans: Sustainability-linked loans (SLLs) allow for a direct link between loan pricing and sustainability performance. These loans generally allow for a step-up or step-down to the interest rate once the borrower achieves performance targets for pre-determined ESG indicators. SLLs do not necessarily require a use of proceeds and can be structured as a general corporate obligation, with the sustainability performance linked to corporate or project-specific factors.
  • ESG-compliant loans: All IFC loans are assessed against the IFC Sustainability Framework and Performance Standards. The framework includes both a process of negative screening (ensuring IFC does not lend to prohibited industries), as well as proactive engagement which helps identify ESG risks and supports clients to develop action plans to improve performance. IFC Performance Standards underpin the Equator Principles, the ESG industry standard in project finance. ​ 
  • Impact-labelled loans: Through its Anticipated Impact Measurement and Monitoring Framework, IFC has developed a framework to assess, monitor and report on project-level impacts. This systematic approach is the fundamental underpinning to IFC’s Operating Principles for Impact Management. These principles help third-party investors to establish an appropriate framework to align their investment strategy with specific development impact objectives. The benefits of IFC’s “umbrella” allow our partners to include IFC syndicated products in their impact reporting based upon IFC’s approach.