The EBRD announced today it has signed the Operating Principles for Impact Management—a market standard for impact investing in which investors seek to generate positive impact for people and the planet alongside financial returns.
The Principles bring greater transparency, credibility, and discipline to the impact investing market.
The 60 organisations adopting the Principles today collectively hold at least US$350 billion in assets invested for impact, which they commit to manage in accordance with the Principles.
Future investments for impact will also adhere to the Principles. These provide a clear and common market standard for what constitutes an impact investment, addressing concerns about “impact-washing”.
The EBRD contributed to the development of the Principles, which was led by the International Finance Corporation (IFC), in collaboration with leading asset managers, asset owners, asset allocators, development banks, and financial institutions, following a three-month public stakeholder consultation.
“Investing for impact and with impact in emerging and frontier economies is what the EBRD was created for in 1991,” said EBRD President Sir Suma Chakrabarti.
“We’re pleased to join other signatories of these Principles to create common high standards for impact investors and attract the capital that is urgently needed to address global development challenges,” he added.
In a new report—Creating Impact: The Promise of Impact Investing—the IFC estimates investor appetite for impact investment today could be as much as US$ 26 trillion. This includes US$ 5 trillion in private markets involving private equity, non-sovereign debt, and venture capital, and as much as US$ 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, in order to achieve positive measurable outcomes for society as well as adequate financial returns.
The Principles launched today facilitate this process by creating clarity and consistency about what constitutes managing impact investments, so as to bolster confidence in the market.
The Principles draw on the experience of leading DFIs, such as IFC and the EBRD, in investing in emerging markets to achieve strong development impact and financial returns. The Principles reflect best practice 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 their adoption..
The EBRD, one of the original impact investors, is a strong partner for other like-minded investors looking to generate both a commercial return and meaningful impact through its investments.
First Adopters of the Operating Principles for Impact Management:
2. Acumen Capital Partners
3. AlphaMundi Group
6. AXA Investment Managers
7. the Belgian Investment Company for Developing Countries (BIO)
8. Blue like an Orange Sustainable Capital
9. Blue Orchard Finance, Ltd.
10. BNP Paribas Asset Management
11. Calvert Impact Capital
12. Capria Ventures
13. CDC Group plc.
17. Cordiant Capital Inc.
18. Credit Suisse
19. DEG – Deutsche Entwicklungs- und Investitionsgesellschaft mbhH
20. Development Bank of Latin America (CAF)
23. FinDev Canada
25. Flat Wortd Partners
27. IDB Invest
30. ILX Fund
32. Investisseurs & Partenaires – I&P
33. Islamic Corporation for the Development of the Private Sector (ICD)
34. Kohlberg Kravis Roberts & Co. L.P.
35. LeapFrog Investments
36. LGT Impact Ventures (LGT IV)
37. LGT Venture Philantropy (LGT VP)
38. MicroVest Capital Management
40. National Managing Holding “Baiterek” JSC
44. Oesterreichische Entwicklungsbank AG (OeEB)
45. Overseas Private Investment Corporation (OPIC)
46. Partners Group
50. Prudential Financial Inc.
55. The Rise Fund
56. The Rock Creek Group
60. Zurich Insurance Group Ltd.