For six decades, IFC has been at the forefront of impact investing in emerging markets. Over the years, others joined us in the search for impact and returns. With the establishment of the Operating Principles for Impact Management, we hope to work with a much broader universe of private investors and development finance institutions to mobilize the trillions of dollars in financing necessary to achieve the Sustainable Development Goals (SDGs).
Impact investing has emerged as a significant opportunity to mobilize capital into investments that target measurable positive social, economic, or environmental impact alongside financial returns. A growing number of investors are incorporating impact investments into portfolios. Many are adopting the SDGs and other goals as a reference point to illustrate the relationship between their investments and impact.
The question for many investors is how to increase their impact. Despite increased interest and a growing number of product launches claiming to be impact investments, there has been no common discipline for how investors should manage investments for impact and the systems they need to support it. This has created complexity and confusion for investors, including about the differences between impact investing and other forms of responsible investing.
To address this challenge, IFC—in consultation with a core group of external stakeholders—developed and launched the Operating Principles for Impact Management in the spring of 2019. These Principles support the development of the impact investing industry by establishing a common discipline around the management of investments for impact.