IFC is committed to redefining development finance, using the core ideas of our 3.0 strategy to create markets, work Upstream to develop and de-risk bankable projects, and mobilize private investors into markets to support growth and jobs.
- Leading an Upstream movement: At this time, there are not enough bankable projects in emerging markets to solve the development challenges that countries face. We are working Upstream with our partners to create pipelines of projects that will attract private investors into new markets while encouraging them to return to markets that may have seen drops in investment due to COVID-19 and other factors. This fiscal year marked an all-out push by IFC to fully embrace and implement our Upstream agenda — one that is of crucial importance to our client countries’ futures. These efforts were led by IFC’s Innovation and Upstream Implementation Task Force, which rapidly expanded awareness and increased capacity by delivering knowledge and training to existing staff and the 233 new Upstream recruits. Among other efforts, the Task Force successfully worked across IFC’s regional and industry teams to implement a comprehensive onboarding plan that quickly integrates Upstream talent. IFC also sought to ignite the conversation on Upstream with our partners in the World Bank Group — and beyond, one which we expect to deepen in coming years.
- Driving momentum on impact investing: Together with international financial institutions and private partners, IFC led the launch of the Operating Principles for Impact Management, a framework drawing a distinct line between impact investing — investing with an intent to create specific, measurable policy — and other forms of sustainable and responsible investing. At the end of FY20, 101 investors had signed on to the Operating Principles, an important step in mobilizing the private sector for development finance. The signatories, coming from 26 countries across five continents, are working to align impact measurement systems into a common core of metrics that will improve the ability of investors to compare impact performance across funds and institutions. Signatories must annually disclose the alignment of their impact management systems with the Operating Principles and pursue regular independent verification. An IFC report released this year, Growing Impact — New Insights into the Practice of Impact Investing, estimates the impact investing market size to be as large as $2.1 trillion.
Our work goes beyond investing and advising: we are shaping thinking on private sector development.
- Steering a conversation on how to ensure women’s full participation in the workplace: For many women, reliable and affordable childcare is a prerequisite to full participation in the workforce. Tackling Childcare: A Guide for Employer-Supported Childcare offers how-to advice to employers: it addresses various aspects of employer-supported childcare, including quality, financial sustainability, and results measurement. A companion note, released in April 2020, gives timely guidance to employers on how to provide childcare during the COVID-19 pandemic. Trailblazers, a book published by IFC, offers 20 portraits of female business leadership in emerging and frontier markets. The book inspires women to reach their highest level of professional achievement — and makes the economic case for investing in female-owned businesses.
- Shifting the focus to investment in green buildings: Green construction is one of the largest investment opportunities of the next decade. While several reports have made an environmental and moral case for growing the market for green buildings, a 2019 IFC report made the business case — offering a uniquely private sector perspective. According to the report, Green Buildings: A Finance and Policy Blueprint for Emerging Markets, green buildings will offer a $24.7 trillion investment opportunity in emerging markets by 2030, which will spur economic growth and accelerate sustainable development. The report, which was released in conjunction with the UN Climate Change Conference (COP25), draws on IFC’s almost decade-long experience investing in green buildings.
- Informing the private sector response to COVID-19: IFC provided sector-specific operational analyses and crisis response recommendations in several industries, including infrastructure, logistics, and private equity. These sector notes provide concise analysis of the pandemic’s impact on different sectors and suggest specific steps the private sector can take to contribute to an effective response to the global crisis.