Away from the talk of pullouts and relocation, there is a quiet new opportunity at the World Bank Group to improve development funding around the world. A chance to make trillions of dollars of financial flows more environmentally and socially responsible.
The World Bank’s private sector arm, the International Finance Corporation, is set to announce a review of its sustainability framework. This includes its environmental and social safeguards, which shape the tens of billions that IFC invests annually, plus the investments of over 120 financial institutions that align with them. IFC estimates that its “performance standards” influenced $4.5 trillion of financial flows in emerging markets in the last decade alone.
However, IFC last updated these standards in 2011, and a lot has changed in the last 14 years. Since the 2008 financial crisis, multilateral development banks have increasingly turned to a more hands off form of lending via financial intermediaries — such as private equity funds or commercial banks. Today, just under half of IFC’s portfolio, representing nearly $40 billion, is invested in financial intermediaries.
About the authors
Kate Geary
Kate Geary is the program director for rights and accountability at Recourse, an international organization that campaigns for people and the planet to be at the heart of development. Kate previously led Oxfam’s advocacy on land rights, working in support of communities affected by land grabs and campaigning for policy change, and she has published extensively on human rights and development issues. She is a graduate of Oxford University.
Daniel Willis
Daniel Willis is the finance campaign manager at Recourse, an international organization that campaigns for people and the planet to be at the heart of development. He leads campaigns to shift public finance out of fossil fuels, notably coal, and hold development finance institutions accountable. He has a Ph.D. from University College London, and his research has been widely published in the media and peer-reviewed journals.
