The International Finance Corporation (IFC), part of the World Bank Group, has launched a wide-reaching review of its Sustainability Framework, the blueprint that governs trillions of dollars in private sector investments across emerging markets.
According to ESG News, marking the first major update since 2012, the overhaul will span several years and aims to strengthen environmental and social (E&S) safeguards in response to growing global challenges.
The IFC’s framework includes three foundational components: its Performance Standards on Environmental and Social Sustainability, its overarching Sustainability Policy, and its Access to Information Policy (AIP). These elements serve as the benchmark for ESG due diligence across the developing world and influence over $4.5tn in investment flows—directly through the IFC and MIGA (the Multilateral Investment Guarantee Agency), as well as through more than 120 financial institutions aligned with the Equator Principles.
The review will be carried out in two key phases. Phase I, the “Dialogue Phase,” is set to run from 2025 to early 2026, focusing on engagement with stakeholders around core themes such as climate risk, financial intermediaries, and human and Indigenous rights. Phase II will span from mid-2026 to early 2028 and involve two rounds of global consultation on a draft framework. A final version is due by 2028, along with a full public report of the consultation process.
Critics have long called for reform, particularly in the area of financial intermediary lending, which accounts for nearly half of the IFC’s portfolio. Unlike other development finance institutions, the IFC lacks a dedicated safeguard policy for this area, raising concerns about transparency and accountability.
Kate Geary, programme director for Rights & Accountability at Recourse, said, “This review represents a generational opportunity to align trillions in financial flows with responsible investment practices.”
The updated framework is expected to incorporate new ESG considerations absent from the 2012 edition, including climate change, just transition goals, nature-related financial disclosures, and supply chain risks. It also promises closer alignment with the World Bank’s safeguards and greater integration of human rights and grievance mechanisms.
The implications of this review extend far beyond the IFC’s own clients. The Performance Standards are embedded in private equity ESG policies, used by impact investors and blended finance structures, and inform ESG risk analysis for sovereign and corporate debt in emerging economies. Many view the updated framework as a bellwether for future ESG regulation and investor expectations across frontier markets.
Stakeholder engagement is now open, and the IFC has called on investors, corporates, civil society, and communities to help shape the final outcome.
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