60 investors commit to manage $ 350 b in assets in line with new impact principles

IFC, a member of the World Bank Group, last week announced that 59 investors have adopted the Operating Principles for Impact Management – a market standard for impact investing in which investors seek to generate positive impact for society alongside financial returns in a disciplined and transparent way. The Principles bring greater transparency, credibility, and discipline to the impact investing market.

The organisations adopting the Principles collectively hold at least ($ 250 billion) in assets invested for impact, which they commit to manage in accordance with the Principles. Future investments for impact will also adhere to the Principles. The Principles provide clear a common market standard for what constitutes an impact investment, addressing concerns about ‘impact-washing’. IFC led the development of the Principles, in collaboration with leading asset managers, asset owners, asset allocators, development banks, and financial institutions, following a three-month public stakeholder consultation.

“This is history in the making,” said IFC CEO Philippe Le Houérou. “We believe there is now potential to bring impact investing into mainstream. Our ambitions are very high – we want much more money managed for impact because there’s no time to lose to protect our planet and communities around the world.”

In a new report – Creating Impact: The Promise of Impact Investing – IFC estimates investor appetite for impact investment could today be as much as $ 26 trillion. This includes $ 5 trillion in private markets involving private equity, nonsovereign debt, and venture capital, and as much as $ 21 trillion in publicly traded stocks and bonds.

To fulfil this potential, impact investing needs to offer investors a transparent basis on which they can invest their money to achieve positive measurable outcomes for society in addition to adequate financial returns. The Principles launched today facilitate this process by creating clarity and consistency regarding what constitutes managing investments for impact to bolster confidence in the market.

IFC is the one of the oldest and the largest impact investors – demonstrating that it’s possible to achieve significant development impact while generating solid financial returns. On average, IFC’s realised equity returns from 1988 to 2016 compared well to returns from the MSCI Emerging Market Index.The Principles draw on IFC’s experience in investing in emerging markets to achieve strong development impact and financial returns. They reflect best practices across a range of public and private institutions. They integrate impact considerations into all phases of the investment lifecycle: strategy, origination and structuring, portfolio management, exit, and independent verification. Critically, they call for annual disclosure as to how signatories implement the principles, including independent verification, which will provide credibility to the adoption of the Principles.

First adopters of the Operating Principles for Impact Management

1.    IFC

2.    Actis

3.    Acumen Capital Partners

4.    AlphaMundi Group

5.    Amundi

6.    AXA Investment Managers

7.    Baiterek National Managing Holding JSC

8.    Belgian Investment Company for Developing Countries (BIO)

9.    Blue like an Orange Sustainable Capital

10.    BlueOrchard Finance Ltd.

11.    BNP Paribas Asset Management

12.    Calvert Impact Capital

13.    Capria Ventures

14.    Cardano Development B.V. (ILX fund and TCX)

15.    CDC Group plc.

16.    CDP – Cassa Depositi e Prestiti

17.    COFIDES

18.    Community Investment Management (CIM)

19.    Cordiant Capital

20.    Credit Suisse

21.    DEG – Deutsche Entwicklungs- und Investitionsgesellschaft mbH

22.    Development Bank of Latin America (CAF)

23.    European Bank for Reconstruction and Development (EBRD)

24.    European Development Finance Institutions (EDFI)

25.    European Investment Bank (EIB)

26.    FinDev Canada

27.    Finnfund

28.    Flat World Partners

29.    FMO – the Netherlands Development Finance Company

30.    IDB Invest, Member of the Inter-American Development Bank Group

31.    IFC Asset Management Company (AMC)

32.    IFU – Investment Fund for Developing Countries

33.    Incofin Investment Management

34.    Investisseurs& Partenaires – I&P

35.    Islamic Corporation for the Development of the Private Sector, Member of IsDB Group

36.    Kohlberg Kravis Roberts & Co. L.P.

37.    LeapFrog Investments

38.    LGT Impact

39.    LGT Venture Philanthropy

40.    MicroVest Capital Management

41.    Multilateral Investment Guarantee Agency (MIGA)

42.    Norfund

43.    Nuveen

44.    Obviam

45.    Oesterreichische Entwicklungsbank AG (OeEB)

46.    Overseas Private Investment Corporation (OPIC)

47.    Partners Group

48.    Phatisa

49.    Proparco

50.    Prudential Financial Inc.

51.    responsAbility

52.    STOA Infra & Energy

53.    Swedfund

54.    Swiss Infestment Fund for Emerging Markets (SIFEM)

55.    The Rise Fund

56.The Rock Creek Group

57.    UBS

58.    Water.org

59.    WaterEquity

60.    Zurich Insurance Group Ltd.