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    • Opinion
    • Sustainable development

    Opinion: Stepping up our game on environment and social issues

    International Finance Corporation CEO Philippe Le Houérou unveils his agency's plan for strengthening engagement with local communities and civil society organizations.

    By Philippe Le Houérou // 13 June 2019
    Pablo Cardinale, an IFC principal environment specialist, talks to employee of ICE, Alex Gerardo Gonzalez Aray (far left) at the Reventazon power station in Siquerres, Costa Rica. Photo by: Dominic Chavez / International Finance Corporation

    For nearly two decades, the International Finance Corporation has been a global leader in establishing Environmental and Social Performance Standards, and good corporate governance practices for our clients. We have experienced experts in all these fields.

    What does this mean in practice? It means, for example, that we engaged together with our clients for months with dozens of communities in the Andean forest so that a natural gas pipeline circumvents their water sources and sacred areas; we reviewed studies of the patterns of migrating birds over the Middle East so that a client’s wind farm in Jordan is located outside their migration patterns; and we helped persuade family-owned companies in Iraq to open up their corporate boards to outsiders — in order to create a more prosperous and sustainable future.

    Opinion: At IFC, accountability is of utmost importance

    IFC chief Philippe Le Houérou ushers in a new era of accountability — one that "will require more dedicated IFC resources" and "a change in our behavior and culture."

    In particular, we must increase our focus on communities and do much better at meaningfully engaging with them. That doesn’t always mean agreeing with them. But it does mean listening, explaining, and understanding their concerns. Less than two months ago, I pledged that we would be much more proactive in this regard.

    Now we are setting a plan in motion.

    First, we are moving the current ESG Advice and Solutions department out of our legal vice presidency and into our operations vice presidency. I want our operations teams, alongside their environment and social, or E&S, colleagues, to take greater ownership and responsibility for helping clients address any problems that arise connected to their communities and the environment.

    Second, we will create a new Environment and Social Policy and Risk department, managed by a senior director who will report to me. This department will serve as the “regulator” of our E&S functions.

    Its wide range of responsibilities include:

    • Establishing and maintaining policies and standards and ensuring compliance with them.

    • Setting E&S risk ratings for projects.  

    • Providing oversight of high-risk projects, including the ability to mobilize a rapid response team as needed.

    • Overseeing operational teams in handling all complaints from affected communities.

    • Serving as a corporate interface with senior management, the board and our independent accountability mechanism, the Office of the Compliance Advisor Ombudsman.

    • Making sure that we translate lessons learned from difficult projects and problem cases as well as successes into new tools and approaches.

    To support this plan, we will put more resources into our E&S work — a 20% increase in staff who focus on these issues, including more social specialists working with private sector clients and communities. 

    We must improve E&S risk management and accountability throughout the project cycle and close any existing gap in IFC’s responsiveness to complaints from affected communities.

     These changes will go into effect July 1. We are shifting our approach to communities and civil society directly and with our clients — toward much more upstream, proactive, and systematic engagement. We will improve and learn, and, project by project, we will always keep in mind our development mission and goals to end extreme poverty by 2030 and boost shared prosperity. 

    • Social/Inclusive Development
    • Institutional Development
    • Banking & Finance
    • IFC
    Printing articles to share with others is a breach of our terms and conditions and copyright policy. Please use the sharing options on the left side of the article. Devex Pro members may share up to 10 articles per month using the Pro share tool ( ).
    The views in this opinion piece do not necessarily reflect Devex's editorial views.

    About the author

    • Philippe Le Houérou

      Philippe Le Houérou

      Philippe Le Houérou is the chairman of the board of Agence Française de Développement, a distinguished fellow at the Emerging Markets Forum, chair of the aid architecture group at FERDI, Clermont-Ferrand, and a distinguished fellow at the Finance for Development Lab in Paris. From March 2016 to October 2020, he was the chief executive officer of the International Finance Corporation — the private sector arm of the World Bank Group.

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