New International Finance Corporation Sustainability Standards: Watershed or Watered Down?

A group of socially responsible investors express concern over perceived shortcomings in the proposed IFC policy revisions, while the IFC points out where the policies break new ground.

Last Friday marks the end of the 60-day public comment period on the second draft of the Policy and Performance Standards on Social & Environmental Sustainability by the International Finance Corporation (IFC), the private lending arm of the World Bank Group (WBG). The IFC has engaged stakeholders globally in this multi-year policy review process with the goal of creating policies that reflect best practice in the finance industry for addressing social and environmental problems.

Two days before the deadline, a group of 14 socially responsible investing (SRI) firms and organizations representing over $117 billion in assets filed a letter with the IFC, following up on a previous letter from April 2005 and an earlier letter from April 2004.

"We are writing to express our ongoing concern that while the public comment period was extended, we do not see many substantive changes to the Performance Standards or Disclosure Policy from the recommendations provided by companies that are IFC clients, civil society organizations, and investors over the last year," states Lauren Compere, Chief Administrative Officer and Global Advocacy Coordinator for Boston Common Asset Management, who authored the letter.

"We also do not perceive willingness from the IFC to make meaningful changes at this stage in the process and believe there is much need for improvements."