Two recent announcements from IFC (the World Bank Group member dedicated to private sector development in emerging markets) demonstrate continuing leadership in emerging market sustainable investing.
The IFC's inaugural green bond, a $200 Million, four year, fixed rate issue scheduled to close on April 26, will reserve all proceeds for investment in climate friendly projects in developing markets. This is the first time IFC will dedicate bond funds to a specific pool of loans. The green feature makes the bonds attractive to a growing audience of institutions charged with finding socially and environmentally responsible investments. “The Green Bond is yet another example of how IFC is creating innovative financial products that offer both development impact and good return for investors”, said Nina Shapiro, IFC Vice President and Treasurer.
IFC has also published a brief on it's ongoing sustainable finance mission in preparation for the Spring Meetings – the annual review of the joint IMF-World Bank Development Committee and the IMF International Monetary and Financial Committee held April 24 and 25 in Washington, DC. The plan is not just to invest IFC funds wisely, but to build investment infrastructure in developing countries while using IFC's track record to encourage and enable sustainable investment by global capital markets in those developing countries.
Three IFC focal points seem particularly exciting for the sustainable investment community:
- IFC is developing the necessary market infrastructure to support the growth of sustainable investment by funding the development of enhanced stock market indices, market research, and training; and by sharing IFC’s substantial experience in incorporating environmental and social issues when investing in emerging markets.
- With assets of over $20 trillion and long-term investment time horizons, pension funds are a potentially important source of investment capital for the hundreds of millions needed to combat climate change. IFC is working with pension funds to develop new financial instruments to help tackle climate change.
- Private Equity is an increasingly important source of capital for growing businesses in emerging economies. IFC is supporting private equity managers use of sustainability to identify new investment opportunities and drive improvement projects within their investments.
This work, along with projects like the Carbon Efficient Index, developed with S&P and Trucost and the Private Equity Toolkit, designed to bring a serious look at sustainability into private equity's investment decision process, show what IFC's mission is all about.
Photo credit: acameronhuff