IFC: A Sustainable Bond Issuer

IFC holds itself as a bond issuer embedding the highest standards of Environmental, Social and Governance practices. IFC’s ESG policies, guidelines, and tools are widely adopted as market standards and embedded in operational policies by corporations, investors, financial intermediaries, stock exchanges, regulators, and countries. This helps emerging markets raise their ESG standards and level the playing field. There have been a number of studies looking at the relation between companies’ ESG and their financial performance. The vast majority of them find a direct link: companies that do good by the environment, their labor force, and communities, do well financially.

In 2021, INTERNATIONAL FINANCE CORPORATION received a rating of AAA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment.

Unique Markets, Responsible Investing: IFC’s Integrity Due Diligence Process

IFC works with a diverse range of development partners: from multi-nationals to small local companies, and from government institutions to NGOs, in both investment and advisory services projects. IFC conducts integrity due diligence (“IDD”) on its business clients and partners as described in this booklet. This is similar to the “Know Your Customer” process used in the financial industry. IDD is critical to ensure that IFC works with reputable and sustainable business partners so that its investments are successful, its resources are used effectively, and its development objectives are met.

Learn more about IFC's Integrity Due Diligence Process here.

IFC’s Governance and Accountability Framework

This booklet provides an overview of the governance of the World Bank Group (WBG) and IFC’s relationship to other WBG member institutions as well as to the WBG oversight and accountability units. It also details the roles and responsibilities of IFC’s Board of Governors, Board of Directors and management structures and provides a summary of IFC’s investment approval process and risk management functions.

Learn more about IFC's Governance and Accountability Framework here.

Facilitating Multiple Roles: IFC Conflict of Interest Management Process

IFC has in place policies and processes to manage various forms of conflict of interest (COIs) that arise in the course of its activities. IFC utilizes and leverages different products and services—and draws on the products and services of other WBG institutions—to provide development solutions customized to meet client needs. IFC recognizes that COIs may arise when IFC is involved in multiple roles in a country or sector and is committed to exercise professional judgement in the interests of each of its clients. In IFC’s experience, COIs involving IFC can almost always be managed effectively. The booklet also provides overview of IFC COI frameworks for addressing personal COIs of staff members and COIs related to nominee directorship positions.

Learn more about IFC's Conflict of Interest Management Process here,

IFC’s Alignment with SDGs

As part of the World Bank Group, IFC has two overarching goals—ending extreme poverty by 2030 and boosting shared prosperity—that are aligned with the SDGs. Through direct investments and advisory services, IFC provides private sector solutions that lay the foundation for sustainable and inclusive economic growth. IFC contributes to the SDGs through two pathways namely: project outcomes and market creation

Learn more about how IFC aligns to the Sustainable Development Goals here and the methodology of reporting IFC’s contribution to the SDGs here.

IFC’s ESG Approach

As part of its funding program, IFC actively issues ESG bonds also known as Socially Responsible Investments. Our funding program finances loans to IFC Clients. A subset of our loan portfolio is funded through our established Green Bond program which finances climate friendly projects and our Social Bond Program which finances projects that aim to alleviate social issues. Both programs are fully aligned to the capital markets’ most referenced frameworks: The Green Bond Principles and The Social Bond Principles. 

All projects financed by IFC must adhere to stringent ESG standards and our Sustainability Framework which help our clients do business in a sustainable way. It promotes sound environmental and social practices, encourages transparency and accountability, and contributes to positive development impacts. IFC's Performance Standards, which are part of the Sustainability Framework, have become globally recognized as a benchmark for environmental and social risk management in the private sector.

IFC’s Sustainability Framework consists of

• The Policy on Environmental and Social Sustainability, which defines IFC's commitments to environmental and social sustainability.
• The Performance Standards, which define clients' responsibilities for managing their environmental and social risks.
• The Access to Information Policy, which articulates IFC's commitment to transparency.
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Policies

• The updated 2012 edition of IFC's Sustainability Framework applies to all investment and advisory clients whose projects go through IFC's initial credit review process after January 1, 2012.
• The 2006 edition of IFC's Sustainability Framework applies to investments that go through IFC's initial credit review process from April 30, 2006 to December 31, 2011.
• Investments made  prior to April 30, 2006 are subject to the Safeguard Policies.

 Nearly 90 percent of our clients believe that our environment, social, and governance support is key in helping them reach their long-term business goals, improve their relations with stakeholders and local communities, and boost their brand value and recognition.

IFC believes that transparency and accountability are fundamental to fulfilling our development mandate and strengthening public trust in IFC and our clients. We disclose information about our projects, including project-level environmental and social review summaries (ESRS), through our disclosure portal.

Our work is continuously evaluated by two independent accountability mechanisms:

The Independent Evaluation Group is charged with evaluating the activities of IBRD and IDA (the World Bank), the work of IFC in private sector development, and MIGA's guarantee projects and services. The goals of evaluation are to provide an objective assessment of the results of the Bank Group’s work and to identify and disseminate lessons learned from experience.

The Compliance Advisor Ombudsman (CAO) is the independent recourse mechanism for IFC and MIGA. The CAO responds to complaints from project-affected communities with the goal of enhancing social and environmental outcomes on the ground.