Higher impact portfolio
We aim to create a higher impact portfolio by focusing investments on three SDGs across all our sectors: Decent Work and Economic Growth (SDG 8), Reduced Inequalities (SDG 10), and Climate Action (SDG 13). Through our sector-specific strategies, we also contribute to Zero Hunger (SDG 2), Gender Equality (SDG 5), Renewable and Affordable Energy (SDG 7), and Partnerships for the Goals (SDG 17). Meanwhile, we contribute to other SDGs by ensuring our investments comply with international ESG standards and policies.
SDG 8 | Decent Work and Economic Growth
The central goal of SDG 8 is increased economic growth and decent work for all. By investing in underserved markets, we support jobs, improved labor standards and economic prosperity. Jobs allow people to develop themselves and lift their families out of poverty.
Our contribution consists of:
Providing finance to enhance economic growth and support jobs. In line with our mandate, we invest in low- and middle-income countries where we are additional to the market;
Promoting and protecting labor standards by working with our clients to meet our ESG standards, which are based on the IFC Performance Standards and ILO labor standards. This includes freedom from forced and child labor, freedom from discrimination at work, freedom of association and the right to collective bargaining;
Through our investments in financial institutions, we invest in small and medium-sized enterprises (SMEs). Several studies show that SMEs are job generators although their financing needs are often underserved.
SDG 10 | Reduced Inequalities
Inequality within and among countries remains a key issue in the world today. SDG 10 is about promoting social and economic inclusion of all, which we support by investing in the world’s poorest countries and inclusive business. Reducing inequality also strives for gender equality as women are often underserved in low-income countries.
Our contribution consists of:
Providing finance to inclusive businesses that reduce inequalities within countries. Inclusive businesses expand access to goods, services and livelihood opportunities on a commercially viable basis to people at the Base of the Pyramid by making them part of the companies' value chain of suppliers, distributors, retailers or customers;
Providing finance to projects in the Least Developed Countries to reduce inequalities between countries;
Providing finance to financial institutions with an SME and/or microfinance portfolio to increase access to capital and support business growth;
Providing finance to power generation projects and off-grid power solutions to increase access to reliable and sustainable energy.
SDG 13 | Climate Action
We all experience the effects of climate change. Annual average economic losses due to climate-related disasters are estimated by the UN to be hundreds of billions of dollars. Each country has a responsibility to contribute to a solution to limit the global mean temperature increase to below 2 degrees. An annual injection of approximately US$100 billion is needed (and more is likely required) to help developing countries to adapt to climate change and invest in low-carbon economies.
Our contribution consists of:
Providing finance to projects that reduce greenhouse gas emissions, increase resource efficiency, preserve and grow natural capital and support climate mitigation;
Building expertise and deal experience on climate adaptation;
Aiming to align our portfolio to a 1.5-degree pathway. Staying on this pathway requires a continued reduction in portfolio emissions. This can be achieved through growing the green volumes across all departments, investing in projects delivering negative emissions, developing an approach to measure and report on climate risk, and finding ways to further improve data quality and availability.
To achieve the higher impact we aspire to, we focus our investments on regions where our impact can be the greatest and on sectors that are crucial to economic, environmental and social progress.
We maintain a wide geographical spread to optimize our impact and diversify risks, while prioritizing specific regions and countries where development impact is needed most. We increase our focus on countries in Africa, Asia and the European Neighborhood. We continue to invest in Latin America and the Caribbean, focusing our efforts on opportunities to achieve impact at scale by leveraging our strong network and client relationships, for instance, through our sector initiatives to raise ESG standards in the financial industry.
We focus on three sectors that – in our view – are crucial to a country’s economic and social progress:
Agribusiness, Food & Water. This sector can ensure that by 2050, 9 billion people have access to food and that the environmental and social footprint is minimized. To this end, we invest in advanced technologies and apply international standards. We finance sustainable agribusiness companies throughout the value chain including those that make agriculture more water-efficient. We also invest in forestry.
Energy. Approximately a billion people lack access to energy. Many of these people live in rural Africa. Three billion people lack access to clean cooking fuels and technology. We invest in renewable energy, as well as in projects that provide access to energy in less developed economies.
Financial Institutions. Accessible finance is a cornerstone of a strong economy and private sector. A healthy financial sector can bolster entrepreneurs and individuals. We provide long-term funding, risk capital and local currency financing and focus on SME financing. We also promote green lines and look for business models that serve the unbanked.
- 1 As defined by the UN
- 2 https://www.undp.org/content/undp/en/home/sustainable-development-goals/goal-13-climate-action.html
- 3 https://www.un.org/sustainabledevelopment/wp-content/uploads/2016/08/2.pdf
- 4 https://ourworldindata.org/energy-access#access-to-clean-fuels-for-cooking