IFC: Leading the 
Charge Towards a 
Sustainable Future
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Environmental, Social and Governance (ESG) Overview
The growing focus on ESG considerations by investors, combined with increasing regulatory requirements, has made ESG 
integration a critical component of responsible investment decision-making.
What is ESG?
ESG evaluates non-financial aspects like environmental impact (e.g., carbon 
emissions), social practices (e.g., labor standards), and governance (e.g., anti-
corruption policies) for companies and investments.
How does ESG benefit investors?
ESG benefits investors through enhanced risk management, financial 
performance, and sustainable product demand. Integrating ESG factors 
reduces risk and fosters portfolio sustainability, yielding improved financial 
outcomes.
Evolving ESG Regulatory Requirements
Recent ESG regulations, like SFDR and EU Taxonomy, aim to boost 
transparency, standardize disclosures, and promote corporate accountability 
in ESG practices.
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Pioneering work: IFC 
pioneered integrating 
ESG considerations 
into investments, 
setting a benchmark 
for development 
finance institutions, 
for over two decades.
Global reach: IFC's 
global presence 
across 100+ countries 
brings diverse sector 
expertise, fostering a 
comprehensive 
approach to ESG 
issues.
Partnership 
approach: IFC 
collaborates with 
governments and the 
private sector to drive 
sustainable 
development, 
showcasing a history 
of successful ESG 
investments.
Innovative solutions:
IFC spearheads 
innovative solutions 
for ESG challenges 
and leads in creating 
new financial tools 
for sustainable 
investments.
Influence on industry 
standards: IFC set 
industry standards for 
ESG reporting and 
disclosure and has 
worked with other 
organizations to 
promote best 
practices in ESG 
management.
Strong commitment: 
IFC is committed to 
sustainability, setting 
ambitious targets to 
reduce its carbon 
footprint and drive 
sustainable 
development.
IFC – a global leader in responsible investment
IFC’s comprehensive and integrated approach to ESG and its commitment to promoting ESG best practices and standards in 
the industries in which it invests is central to its mission and strategy.
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IFC’s Policy on 
Environmental and Social 
Sustainability, which 
defines IFC’s 
commitments, guides its 
investments and sets 
expectations for ESG 
performance and impacts.
IFC’s Performance 
Standards, which establish 
requirements each client is 
to meet throughout the 
life of an investment and 
provide guidance on how 
to address ESG issues in 
projects.
Access to Information 
Policy, which promotes 
transparency and 
accountability by providing 
stakeholders with access 
to information about IFC’s 
operations and 
investments.
IFC’s ESG Framework
By incorporating IFC’s best-in-class policies and methodologies, IFC can ensure its investments are guided by a comprehensive 
and consistent approach to ESG and promote sustainable development and environmental and social responsibility.
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ESG in IFC’s Investment Decision Making
IFC identifies and assesses ESG risks and opportunities in potential investments and uses ESG criteria to inform investment 
analysis and decision-making.
IFC’s Performance Standards
IFC’s best-in-class Performance Standards set the bar for ESG performance in the development 
finance industry.
The 8 standards are designed to help companies manage ESG risks, promote sustainable 
development and improve ESG performance. They also help investors measure the ESG performance 
of their investments and make informed decisions about the impact of their investments.
The Performance Standards have become globally recognized as a benchmark for environmental and 
social risk management in the private sector.
IFC’s Corporate Governance Methodology
IFC’s Corporate Governance Methodology helps clients improve their governance practices and 
comply with international best practices in corporate governance.
Each IFC investment is evaluated against IFC’s Corporate Governance Methodology, helping IFC 
assess the governance practices of potential clients and monitor the performance of its portfolio 
companies.
IFC’s CG methodology has been distilled into the "Corporate Governance Development Framework" 
which was adopted by 35 DFIs for use in their investment processes.
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The IFC Performance Standards, comprising 8 guidelines, offer a comprehensive
ESG approach for sustainable development and responsible governance. They
aid investors in assessing investment ESG performance and making informed
decisions about their impacts.
Benefits of these performance standards include:
•
Improved sustainability of investments and reduced negative impacts on 
communities and the environment.
•
Enhanced reputation and credibility of companies and investors.
•
Improved stakeholder engagement and management.
•
Increased predictability and consistency in environmental and social risk 
management.
•
Facilitation of access to capital and international markets.
IFC’s Performance Standards
IFC’s first-in-class Performance Standards set the bar for ESG performance in the development finance industry. The standards 
are designed to help companies manage ESG risks, promote sustainable development and improve ESG performance.

IFC’s Corporate 
Governance 
Methodology
IFC’s best-in-class Corporate Governance 
Methodology helps clients improve their 
governance practices and comply with 
international best practices in corporate 
governance. 
Each IFC investment is evaluated against IFC’s Corporate Governance Methodology, which covers 
the following areas:
• Board of Directors: covers the roles and responsibilities of the board and its committees, as well 
as the qualifications and independence of directors.
• Shareholder Rights: covers the rights of shareholders, including the right to vote and receive 
dividends and the protection of minority shareholders.
• Transparency and Disclosure: covers the need for transparent and timely disclosure of financial 
and non-financial information, including environmental and social information.
• Accounting and Auditing: covers the need for sound financial reporting, including the use of 
International Financial Reporting Standards (IFRS).
• Anti-corruption: covers the need for effective anti-corruption measures, including policies, 
procedures and training programs.
• Stakeholder Engagement: covers the need for companies to engage with stakeholders, including 
employees, customers, suppliers and communities, to understand their needs and concerns.
The methodology provides guidance to companies on how to improve their governance practices 
and helps IFC assess the governance practices of potential clients and monitor the performance of 
its portfolio companies.
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ESG in IFC’s Portfolio Management
IFC continuously monitors and manages ESG risks and opportunities in its portfolio and engages with investee companies on 
ESG issues. On each investment, IFC completes E&S due diligence and creates an action plan, inline with IFC’s Performance 
Standards.
Environmental and Social Review Summary and Action Plan (ESRS and ESAP): IFC’s E&S due diligence includes generating an E&S 
Review Summary (ESRS) and an E&S Action Plan (ESAP). IFC discloses each ESRS and consults and engages with affected 
communities. 
Corporate Governance Action plan (CGAP): A customized strategy devised by the borrower outlining particular corporate 
governance steps to ensure their operations align with the Performance Standards and IFC's governance criteria
IFC's Environmental, Health and Safety (EHS) Guidelines: Technical reference documents with general and industry-specific 
standards for IFC clients on how to manage EHS risks and impacts in a sustainable manner. The guidelines cover a wide range of 
environmental and social risks and impacts, including air and water pollution, hazardous waste management, biodiversity 
conservation and social and labor impacts. 
Monitoring occurs on two levels: site visits from IFC staff and submission of the client’s Annual Monitoring Report on progress in 
meeting the E&S terms of the investment agreement. In addition, IFC assigns each investment an E&S Risk Rating (ESRR) at 
appraisal and updates it at least annually in portfolio.
Disclosure: For each proposed investment or advisory services project, IFC discloses relevant project information, environmental 
and social implications, and expected development impact. Investments are disclosed prior to consideration by IFC's Board of 
Directors, and advisory projects are disclosed following project approval.
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Impact and Results
IFC’s ESG performance is regularly assessed and monitored, with key metrics and target goals used to measure progress.
IFC measures its development impact through the AIMM system, development Impact Indicators and mapping them to the SDGs.
Anticipated Impact Measurement and Monitoring (AIMM) 
IFC assesses (ex-ante) and measures (ex-post) each investment’s expected 
development impact using the AIMM system.
The system assesses the expected development impact of IFC investments 
prior to investment and then measures that impact over the project life. 
Development Impact Indicators
IFC tracks the impacts of its investments using project-level indicators 
which are tracked during the life of the project.
The indicators measure and demonstrate IFC’s contribution to sustainable 
development, provide data for reporting and accountability, support 
informed decision-making and foster transparency and accountability.
Alignment with the UN 2030 Sustainable Development Goals (SDGs)
IFC aligns its reporting at the portfolio level to the UN SDGs, drawing on 
the results from the project-level indicators. 
IFC is a founding member of the Harmonized Indicators for Private Sector 
Operations (HIPSO), which align the metrics DFIs seek clients to report on. 
This enables comparisons of impact across investors and investments. 
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Alignment to the UN SDGs
IFC aligns its reporting at the portfolio level to the Sustainable Development Goals (“SDGs”), drawing on the results 
from the project-level indicators 
•
The international community, meeting at the United Nations Headquarters in New York in 
September 2015, decided on an agenda of unprecedented scope and significance that 
included 17 new global Sustainable Development Goals.
•
IFC operations contribute to the SDGs. Integral to IFC’s mandate and aligned with the 
WBG’s twin goals are SDGs 1 and 10: ‘No Poverty’ and ‘Reduced Inequality’.
•
At the strategic sector level, IFC promotes investment and advisory projects in 
infrastructure, agriculture, financial inclusion, health and education—aligned with SDGs 
2, 3, 4, 6, 7, and 9.
•
Across sectors and regions, IFC seeks to promote gender equality, employment creation 
and economic growth, cities, environmental and social sustainability, and climate-change 
adaptation and mitigation—aligned with SDGs 5, 8, 11, 12, and 13, respectively. 
•
Furthermore, IFC has prioritized partnership with private investors to mobilize new 
sources of finance—aligned with SDG 17.
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IFC has announced that all its direct operations will be aligned 
with the objectives of the Paris Agreement on climate change. This 
commitment includes 85% of new direct operations to be Paris 
aligned starting July 1, 2023 and 100% of direct operations to be 
Paris aligned starting July 1, 2025.
IFC’s Climate Agenda
In line with the WBG's new Climate Change Action Plan, IFC is accelerating efforts toward climate response and energy 
transition. IFC committed to achieve an average of 35% of climate finance and align 100% of its direct operations to the Paris 
Agreement Goals starting 2025.
IFC’s Paris Alignment Commitment
IFC pledged to increase climate-related investments to 35% of its 
long-term commitment volume from 2021 to 2025, surpassing 
the target with 46% in FY23.
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IFC Climate Commitments as % of Own Account
Own Account Long Term Finance (LTF)
Own Account Short Term Finance (STF)
Mobilization
Climate Finance % of Own Account LTF
50 –
45 –
40 –
35 –
30 –
25 –
20 –
15 –
10 –
5 –
0 –
USD billions
|
2019
|
2020
|
2021
|
2022
|
2023
– 50%
– 45%
– 40%
– 35%
– 30%
– 25%
– 20%
– 15%
– 10%
–
5%
–
0%
29%
30%
32%
35%
46%
% of Own Account LTF
IFC pledged to increase climate-related investments to 35% of its 
long-term commitment volume from 2021 to 2025, surpassing 
the target with 46% in FY23.
IFC’s Climate finance Commitments

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Alignment with mitigation goals
Operations consistent with national low-emissions development pathways and compatible with Paris Agreement objectives.
Alignment with Adaptation and climate-resilience goals
Operations systematically screened for climate-resilience. Support increase in clients’ ability to adapt to climate change.
Accelerated contribution to the transition through climate finance
Further scale up climate finance to 35% by 2025 and operationalize new approaches to support Nationally Determined Contributions
Strategy, Engagement & Policy Development
Develop new strategies, methodologies, policies, and services to support countries and clients put in place long-term strategies for 
low-emissions and climate-resilient development while ensuring consistency with SDGs.
External Reporting
Develop tools and methods for characterizing, monitoring and reporting on Paris-aligned activities.
Align internal activities
Progressively ensure that internal operations, facilities and other internal policies, are in line with the Paris Agreement.
IFC’s Paris Alignment Commitment
IFC and other MDBs devised a joint approach for Paris Alignment goals, focusing on two key building blocks for Mitigation 
(BB1) and Adaptation/Resilience (BB2), while also extending their commitment to include Building Blocks 3 to 6 (BB3-BB6).

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Aligning IFC projects with BB1 and BB2
Building Block 1
Alignment with Climate Mitigation Goals
An operation is considered aligned on climate 
mitigation when it actively contributes to 
decarbonization pathways or supports activities 
that do no harm.
BB1 will be implemented on a project basis. 
Projects will be classified as being in either a 
universally ‘Aligned list’ or a ‘Non-Aligned list’. All 
other projects will need to be assessed through 
five specific criteria to determine alignment.
Building Block 2
Alignment with Adaptation and climate-resilience goals
Client operations will be systematically screened 
for climate-resilience. 
BB2 has a three-level assessment framework: 
Level 1 identifies and assesses climate risk; Level 2 
looks at climate resilience measures and level 3 
asks if the operation is consistent with national 
policies/strategies for climate resilience. If the 
answers to the questions in either level 2 or 3 are 
“no” then the project is not Paris-aligned.

IFC Sustainable Bond Programs
IFC is a sustainable bond issuer with two focused thematic bond programs fully aligned with the Green and Social Bond 
Principles
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IFC’s FY22 Green and
Social Bond Impact Report.
Access the report here.
Program established: 2010
Use of Proceeds: Climate friendly projects including renewable 
energy, energy efficiency, green banking, etc.
Green Bond Framework: Updated in 2022 to include new 
biodiversity, ocean and water categories, and has been second-party 
reviewed by S&P Shades of Green, rated as Medium Green with an 
“Excellent” governance score. 
Program Established: 2017
Use of Proceeds: Projects that aim to address access to 
essential services and income generation to 
underserved target populations in developing countries
Green Bonds
Social Bonds

•
Each IFC investment is subject to IFC’s Sustainability Framework, including          
IFC’s globally recognized Environmental & Social Performance Standards, an 
industry benchmark for private-sector risk management in this area. 
•
Each investment is also assessed through IFC’s Corporate Governance 
Methodology, helping clients adopt global best practices in corporate governance. 
IFC’s Corporate Governance Development Framework has been adopted by 35 
DFIs.
•
IFC has implemented the world-class Anticipated Impact Measurement and 
Monitoring (AIMM) system to define, measure and monitor the positive impact of 
every investment IFC makes across a comprehensive set of parameters. 
•
Each IFC project receives an AIMM score. Scores are comparable across projects 
and industries, allowing IFC to assess expected positive impact at a portfolio level.
•
IFC tracks the impact of each investment across pre-agreed indicators annually. 
IFC has helped standardize impact reporting by DFIs by chairing the Harmonized 
Indicators for Private Sector Operations (HIPSO) indicators. 
•
IFC maps the impact of each of its investments to the UN Sustainable 
Development Goals (SDGs) and aggregates to report its impact on the SDGS at the 
portfolio level.
•
Climate issues are a critical consideration in IFC’s investments. IFC has committed 
to align all of its direct investments with Paris Agreement goals by 2025. 
Conclusion
As a leader in responsible investment, IFC recognizes the importance of ESG and has a comprehensive framework for 
integrating ESG considerations into its investments and operations.
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Annex
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AIMM – IFC’s Impact Measurement System
IFC assesses and measures each investment’s expected development impact using the Anticipated Impact 
Measurement and Monitoring (“AIMM”) system 
•
The AIMM system is IFC’s approach to assess, prior to investment, the expected 
development impact of IFC investments and then measure that impact over the project 
life. 
•
A single AIMM score for each project is arrived at by assessing separately: (a) the 
potential project outcomes; and (b) the project’s capacity to contribute to market 
creation.
•
Each of the project outcomes is assessed individually based on the gap in the project 
country and the expected impact of the project.
•
The components of contribution to market creation are assessed based on the current 
market stage of the project country and the anticipated market movement the project 
will create. 
•
The quantum and likelihood of the impact create both a ‘project score’ and a ‘market 
score’, which are combined to create the AIMM score for each project.
•
The scores are comparable across projects and industries and allow IFC to assess the 
expected impact of operations at a portfolio level.
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