Impact investing has emerged as a significant opportunity to mobilize both public and private 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 Sustainable Development Goals (SDGs), and other widely recognized goals such as COP21 as a reference point to illustrate the relationship between their investments and impact goals.
The question for many investors is how to grow the level of investments targeting impact. Despite the increased interest in and number of product launches claiming to be impact investments, there is no common discipline for how to manage investments for impact and the systems needed to support this. This has created complexity and confusion for investors, as well as a lack of clear distinction between impact investing and other forms of responsible investing.
To address this challenge, IFC, in consultation with a core group of external stakeholders—impact asset managers, asset owners and industry associations—developed draft Operating Principles for Impact Management. The objective is to establish a common discipline and market consensus around the management of investments for impact and help shape and develop this nascent market.
IFC sought reviews of the draft Principles from stakeholders—investors, companies, academics, civil society and governments—from October to December 2018. The Principles have been finalized and officially launched on April 12, 2019 at the World Bank Group-IMF Spring Meetings in Washington, DC.