IFC Models Abstract Principles To Enhance Market For Impact Investing

The International Finance Corporation (IFC), a member of the World Bank Group presented a designed draft principles to enhance the market for impact investing in which investors seek to generate a positive impact for society alongside strong financial returns.

The world’s largest impact investor made the presentation during the annual meetings of the World Bank Group and the International Monetary Fund (IMF), where it also revealed its plan to make things easier for institutional investors holding nearly $100 trillion assets under management worldwide to enter the fast-growing impact investing market and contribute to achieving the Sustainable Development Goals by 2030.

IFC CEO Philippe Le Houérou, speaking on reasons to develop the principles, said the market for impact investing which is currently $228 billion has grown five times higher since 2013 as investors align their investment strategies with the Sustainable Development Goals and the Paris Climate Agreement.

But consensus has not been established on what constitutes an impact investment. Hence, many investments billed as impact investments fall short of their hype, hurting public confidence in the market.

“Now is the time while the market is still young to develop common principles of how to manage investments for impact.

“Our ambition is to grow the market for impact investing exponentially by bringing in institutional investors who hold close to $100 trillion in assets under management.”

The cooperation, however, said it will be inviting investors, companies, academics, civil society, and governments to further review the draft principles as final principles and the first set of signatories will be made public at the Spring Meetings of the World Bank Group and the IMF in April 2019 in Washington, D.C.

IFC partnered with leading asset managers, asset owners, asset allocators, development banks, and financial institutions to lead the development of the principles.