Regions and Countries
By World Bank Photo Collection: The village of Soavina in Madagascar.
Environmental, social, and governance (ESG) is at the core of the sustainable, long-term success of companies and private investment. IFC is a global ESG market leader with expertise and significant experience in tackling the ESG challenges of companies, financial institutions, and markets around the world.
Inadequate ESG practices result in external costs to business operations, the environment, and society and can affect companies’ reputations. This leads to a lack of investor confidence and criticism by civil society and other stakeholders.
IFC ESG advisory services leverage IFC expertise and knowledge to address systemic obstacles to investment and support clients in improving their ESG performance. Using an integrated approach to ESG, we holistically address diverse risks on the ESG spectrum, build capacity, and remove ESG bottlenecks to investment.
IFC defines ESG as a set of factors that companies consider when managing their operations and investors consider when making investments regarding the risks, impacts, and opportunities relating to (but not limited to):
- Environmental issues: potential or actual changes to the physical or natural environment (for example, pollution, biodiversity impacts, carbon emissions, climate change, natural resource use);
- Social issues: potential or actual changes in the surrounding community and workers (for example, land, health and safety, supply chain, diversity, and inclusion);
- Governance: corporate governance structures and processes by which companies are directed and controlled (for example, board structure and diversity, ethical conduct, risk management, disclosure and transparency), including governance of key environmental and social policies and procedures.
Discover IFC's globally recognized benchmarks for environmental and social risk management and corporate governance: IFC Performance Standards on Environmental and Social Sustainability and IFC Corporate Governance Methodology.
Landmark sustainability due diligence directive passes European parliament vote
Easy access to corporate information for investors: Provisional agreement reached on the European Single Access Point (ESAP)
IFC launch Climate Governance: Progression Matrix and Tip Sheet on equipping corporate boards to mitigate Climate risks and seize climate opportunities
New rules on corporate sustainability reporting in Europe: The Corporate Sustainability Reporting Directive
IFC delivers its integrated ESG advisory programs in partnership with development partners that support specific initiatives or countries.
Advance Environmental and Social Governance Regulatory Standards
IFC environmental, social, and governance (ESG) advisory services support the integration of ESG standards into guidelines, codes, policies, and regulations. The program contributes to strengthening the regulatory environment for ESG to provide local guidance and leveling the playing field across the market, focusing on banking and capital market regulators and the real sector.
Build Market Demand and Capacity
We build the capacity of local intermediaries to promote, train, and advise on ESG standards, focusing on the governance of sustainability practices and environmental and social (E&S) risk management. We also create networks of local organizations that can offer services and promote ESG in the future.
We promote good ESG practices based on IFC's long-standing global and regional leadership in ESG. This includes demonstrating the business case for good ESG practices to build demand and increase uptake by companies and financial institutions.
In the context of complex projects involving multiple developers or investors (for example, hydropower, wind and solar power, tourism) in a single geography, IFC provides a landscape advisory approach to de-risk E&S aspects. This intervention in the field addresses risks that are beyond one company’s ability to manage on its own through E&S risks spatial mapping, diagnostics of regulatory frameworks, climate assessments, conflict analysis, cumulative impact assessments, strategic countrywide assessments, multistakeholder engagement platforms, and development of joint management action plans.
Client Support to Clear ESG Bottlenecks to Investment and Improve ESG Performance
We work with companies and financial institutions to analyze and improve ESG practices by providing tailored advice and assisting with implementing recommendations through training, guidance, and development of ESG policies, procedures, and risk management in the field. Our pool of ESG specialists meets our clients’ needs through their global expertise coupled with local market knowledge. They leverage their experience with applying IFC’s Corporate Governance Methodology and Performance Standards requirements in the context of IFC investment transactions.
Financial institutions: IFC supports financial intermediaries such as banks, private equity funds, and other institutional investors in integrating ESG into their credit decision-making and investment operations and in enhancing their corporate governance.
Companies (real sector): IFC supports real sector companies to become ESG leaders by providing hands-on support to improve their ESG practices, ranging from corporate governance that integrates E&S oversight, establishing E&S management systems (ESMS), and sustainability reporting and disclosure. IFC also advises companies on addressing technical E&S issues such as improving occupational health and safety management; tackling E&S risks across supply chains; and addressing a wide range of risks that include gender-based violence, labor, agribusiness, land acquisition, biodiversity, stakeholder engagement, and establishing sound grievance mechanisms.
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Governance for Sustainability
IFC guides companies and financial institutions to set up a corporate governance structure, establish good practices, and integrate E&S issues into processes for high-level decision-making, strategy setting, and risk management. Our experts will work closely with your organization to understand its governance practices and business context and to recommend improvements the company can make to achieve its strategic objectives, development plans, and ambitions. Our support ranges from conducting an initial diagnostic to support and guidance on implementation of recommendations, along with workshops and training for boards and senior management on ESG topics. Our approach is founded on the IFC Corporate Governance Methodology, which integrates governance of E&S risks, and the related tools and guidance materials.
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Environmental and Social Management Systems: Companies
IFC builds the capacity of real sector companies to assess E&S risks and manage their impacts on operations through building, deploying, and institutionalizing an ESMS into core business operations at the corporate and asset levels. Our services include a diagnostic, support with implementation, and workshops to build capacity. The approach is based on IFC’s Performance Standard 1 and the related ESMS diagnostic tool and materials.
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Environmental and Social Management Systems: Financial Institutions
IFC helps banks and investors integrate E&S risks into their credit and investment decision cycles. Our ESMS services for financial institutions may include a gap analysis using ESMS diagnostic tool, a framework composed of nine dimensions and 76 indicators, supporting financial institutions with developing an ESMS policy, sectoral environmental and social risk management guidelines, and assessment checklists, along with transaction-level guidance. In the context of Paris Alignment commitments, we support financial institutions in implementing a comprehensive approach to ESG and climate risk assessment and management, including physical climate risks screening processes and practices and supporting transition finance.
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Sustainability and Climate-Related Disclosure
IFC supports organizations in improving their reporting and disclosure to demonstrate their leadership in ESG practices. This support ranges from conducting a gap analysis and diagnostic of a company’s existing ESG disclosure and annual report; assessing its underlying policies and procedures related to strategy, governance, risk management, and performance; and assistance with preparing an annual report in line with good international practice, local legislation, and the client and their stakeholders’ material issues. IFC also helps with organizing the internal system of corporate reporting, data collection and reporting process, benchmarking, and reviewing ESG key performance indicators. We deliver training for staff, management, and the board and facilitate strategy sessions on setting ESG key performance indicators. We support companies in their climate reporting journey to start or enhance climate reporting of their governance, strategy, risk management, and metrics and targets.
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Climate Governance
Companies and financial institutions are now expected to integrate climate risks into business strategy, culture, and values, which requires adopting adequate climate governance frameworks and having climate-competent boards. IFC’s Climate Governance Progression Matrix, developed using our Corporate Governance Methodology, focuses on the structures and processes needed for climate risk management and adaptation. Our services include climate governance assessments focused on board climate competencies, controls and compliance, climate governance training for boards and senior management, and development of core policies and supporting our clients’ adoption of an adequate climate governance framework.
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ESG and Gender
To support gender equality goals, IFC guides companies on addressing gender-based violence and harassment (GBVH) risks and promoting the advancement of women to boards and senior leadership positions.
- GBVH: IFC proposes an eight-step company-level diagnostic that engages with the workforce and leadership to assist clients in understanding their existing strengths and areas for improvement regarding gender equality and GBVH prevention, response, and mitigation policies, processes, and procedures in place internally and across their supply chains. We support the implementation of actions through board and senior management training, policy development, and monitoring key indicators linked to GBVH;
- GBVH and governance: IFC offers guidance on the effective governance of GBVH risks and trains directors on understanding adequate GBVH risk management to strengthen their oversight of GBVH matters;
- Women on boards and in business leadership: IFC delivers programs to build the capability of men and women leaders to navigate unconscious bias and train cohorts of women to prepare them to serve on boards and in senior management.
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Technical E&S Advice and Guidance
IFC provides technical E&S advice and guidance to financial institutions and companies (real sector) to address ESG bottlenecks and improve performance at upstream, pipeline investment, or portfolio levels. Technical guidance based on the IFC Performance Standards and good international industry E&S practices includes conducting relevant studies and scoping analysis of gaps and ways to bridge them; providing clients with close, on-the-job support; comprehensive trainings; and support to technical and managerial teams and board members.
IFC's global presence and unique expertise are helping companies in emerging markets and developing economies improve their environmental and social governance (ESG) performance and bring international good practices to their markets and economies while building market movers.
Our ESG advisory team includes environmental and social specialists and corporate governance specialists, allowing us to address ESG holistically. All team members have advised companies, regulators, and local ESG organizations and consultants across several countries. They possess international expertise along with local and sector insights to provide advice that is relevant to the local context and bring clients closer to meeting international good practice.
Explore the advisory services and products that IFC offers to companies and financial institutions in your country:
Our team of ESG specialists are organized in three regional groupings, each led by a regional ESG Advisory Lead.
Latin America, Europe, Middle East, Central Asia, Türkiye, and Pakistan
Vladimir Hrle
East Asia and Pacific, South Asia
Africa
Tania Mansour
