Investors adopt IFC’s ‘investing principles’

By Chino S. Leyco

The International Finance Corp. (IFC) said yesterday that several investors have started adopting its market standard aiming to generate positive impact for society while ensuring financial returns in a “disciplined and transparent” way.

In a statement, the World Bank Group member institution, said that 60 investors are adopting IFC’s operating principles for impact management that promotes greater transparency, credibility, and discipline to the investing market.

According to the IFC, the organizations adopting the principles collectively hold over $350 billion in investment assets, which they commit to manage in accordance with the standard.

Future investments for impact will also adhere to the principles, the IFC said.

“The principles provide a clear common market standard for what constitutes an impact investment, addressing concerns about impact-washing,” the company said.

IFC led the development of the principles, in collaboration with leading asset managers, asset owners, asset allocators, development banks, and financial institutions, including a three-month public stakeholder consultation.

“We believe there is now potential to bring impact investing into the mainstream,” Philippe Le Houérou, IFC chief executive said.

“Our ambitions are very high – we want much more money managed for impact because there’s no time to lose to deliver on the billions to trillions agenda,” he added.

IFC estimated that investor appetite for impact investment could today be as much as $26 trillion.

This includes $5 trillion in private markets involving private equity, non-sovereign debt, and venture capital, and as much as $21 trillion in publicly traded stocks and bonds.

To fulfill this potential, IFC said impact investing needs to offer investors a transparent basis on which they can invest their money to achieve positive measurable outcomes for society in addition to financial returns.