DEVELOPING VALUE THE BUSINESS

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Pamela Mosley
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1 DEVELOPING VALUE THE BUSINESS CASE FOR SUSTAINABILITY

countries More than $265 billion invested since our founding in 1956 IFC is the

2 A member of the World Bank Group Provides investment, advice, resource mobilization AAA credit rating; owned by 184 countries Present in nearly 100 countries More than $265 billion invested since our founding in 1956 IFC is the largest global development institution focused on the private sector in emerging markets. 2

IFC: A MEMBER OF THE WORLD BANK GROUP IBRD IDA IFC MIGA ICSID International Bank for Reconstruction and Development International Development Association International Finance Corporation

3 IFC: A MEMBER OF THE WORLD BANK GROUP IBRD IDA IFC MIGA ICSID International Bank for Reconstruction and Development International Development Association International Finance Corporation Multilateral Investment Guarantee Agency International Centre for Settlement of Investment Disputes Loans to middle-income and credit-worthy low-income country governments Interest-free loans and grants to governments of poorest countries Solutions in private sector development Guarantees of foreign direct investment s noncommercial risks Conciliation and arbitration of investment disputes

4 WHAT WE DO Integrated t Solutions, Increased Impact INVESTMENT ADVICE IFC ASSET MANAGEMENT COMPANY Loans Equity Trade and Commodity Finance Syndications Derivative and Structured Finance Blended Finance Innovative Solutions Combining IFC s Expertise and Tools to: Help Create New Markets Unlock Investment t Opportunities Strengthen Clients Performance and Impact Improve Environmental, Social, a nd Corporate Governance Standards Mobilizing and Managing Capital for Investment 3

5 FY17 LONG-TERM INVESTMENT COMMITMENTS: $193BILLION $ $17.5 bn 6,5 $ bn 5,1 $17.7 bn 7,1 $18.8 bn $19.3 bn 7,7 7, ,0 10,0 10,6 11,11 11,9 5 0 FY13 FY14 FY15 FY16 FY17 IFC's Own Account Mobilization 4 4

6 FY17 LONG-TERM INVESTMENT COMMITMENTS BY INDUSTRY COMMITMENTS FOR IFC S ACCOUNT: $11.9 BILLION Financial Markets Infrastructure Agribusiness and Forestry Health and Education Tourism, Retail, and Property Oil, Gas, and Mining Funds Manufacturing Telecommunications and Information Technology 3,0% 3,7% 3,6% 5,8% 9,7% 8,3% 2,0% 14,4% 4% 49,5% 5

7 IFC: ADVICE To Companies To Financial Institutions and Funds To Governments Attracting private investors and partners Entering new markets Increasing impact Improving operational performance and sustainability standards Advancing gender equality Strengthening risk management, diversifying product offerings Promoting universal access to finance, strengthening capital markets, and establishing credit bureaus and collateral registries Developing the private equity industry in frontier markets Structuring public-private partnerships that improve people s access to high-quality infrastructure and basic services Implementing reforms that encourage private investment, spur growth, and create jobs 6

IFC IN SERBIA Serbia became a shareholder and

Since then, IFC's long term finance investment

7 million mobilized from our partners, in 52

Our committed investment portfolio in Serbia as

8 IFC IN SERBIA Serbia became a shareholder and member of IFC in Since then, IFC's long term finance investment in Serbia totaled $2.13 billion, including $794.7 million mobilized from our partners, in 52 projects across a variety of sectors. Our committed investment portfolio in Serbia as of 30 June 2017 is $203.7 million. In fiscal year 2017, IFC invested $29 million in Serbia. 7

9 IFC IN SERBIA IS: ALIBUNAR WIND FARM 19.1 million in loans (A Loan of 15.5 million and a C Loan of 3.6 million) for the 42-megawatt Alibunar wind farm to Elicio, a Belgium- based energy group, in fiscal year The project will reduce an estimated 120,000 tons CO2eq per year. 8

10 IFC IN SERBIA IS: CIBUK 1 WIND FARM IFC is also providing a million lending package to a joint venture developing a 158-MW wind farm, the largest in the Western Balkans. The project will reduce an estimated 370,000 tons of CO2eq per year. 9

IFC IN SERBIA AS: BELGRAD WASTE TO ENERGY

signed a public-private partnership (PPP)

Environment Investment to build and operate a

11 IFC IN SERBIA AS: BELGRAD WASTE TO ENERGY PROJECT The city of Belgrade on September 29, signed a public-private partnership (PPP) contract with Suez Groupe and Itochu Environment Investment to build and operate a new waste treatment and disposal complex over the next 25 years. The project includes a waste-to-energy plant (30MW) that will produce electricity and heat. 10

THE BUSSINES CASE FOR SUSTANABILITY There is a correlation between good E&S performance and

The Harvard Business School study found that E&S performance was stronger (i) in sectors that

particularly important and (iii) where the companies competed on a business-to-consumers bases.

12 THE BUSSINES CASE FOR SUSTANABILITY There is a correlation between good E&S performance and financial i performance. The Harvard Business School study found that E&S performance was stronger (i) in sectors that were significant users of natural resources, (ii) where brand and human capital were particularly important and (iii) where the companies competed on a business-to-consumers bases. content/uploads/2012/04/working et al pdf 11

13 IFC: SUSTAINABILITY Critical to Client Success, Development Impact IFC s commitment to environmental and social sustainability and good corporate governance helps clients: Improve business performance Engage with affected communities Enhance transparency Protect the environment Increase impact 12

14 IFC s SUSTANABILITY FRAMEWORK 13

15 IFC PERFORMANCE STANDARDS A Global Benchmark RISK RESOURCE MANAGEMENT LABOR EFFICIENCY Anticipate risks, avoid, minimize and compensate for any impacts. Treat workers fairly and provide safe and healthy working conditions. Promote energy efficiency, use resources sustainably, and cut greenhouse emissions. COMMUNITY Protect local communities from worksite accidents and other project-related dangers LAND RESETTLEMENT BIODIVERSITY INDIGENOUS PEOPLES CULTURAL HERITAGE Avoid involuntary resettlement and minimize the impact on those displaced. Protect biodiversity and ecosystems. Protect the rights, dignity, and culture of indigenous populations. p Protect cultural heritage and promote equitable sharing of related benefits. 14

16 IFC s FRAMEWORK FOR IDENTIFYING AND ADDRESSING E&S RISKS 15

17 IFC Corporate Governance (CG) Methodology Sharing Best Practice 34 development finance institutions now follow IFC s approach, covering five key areas of risk assessment: 1 Commitment to CG: Awareness and formalization of sound practices Structure/Functioning of Boards of Directors: Board 2 roles, composition, committee structure, procedures, director duties, and overall functioning 3 Control Environment and Processes: Effectiveness of internal controls, risk management, internal/external audit, and compliance functions 4 5 Transparency and Disclosure: Information disclosure to shareholders and markets; transparency of information and financial standards used Rights of Minority Shareholders: Treatment of investors, shareholders rights and protections, annual meeting procedures, conflict/related-party transaction policies 16

18 E&S AND CG (ESG): THE TRIPLE BOTTOM LINE Why the Board should get involved: Regulators are focusing on E&S issues Investors are looking into E&S standards and practices Shareholders E&S concerns Employees can be motivated and protected Sustainability is long-term strategy and action 17

19 DEVELOPING VALUE: THE BUSINESS CASE MATRIX A significant output is the business case matrix which relates key aspects of sustainability to a set of recognized business success factors demonstrating ggraphically where a viable business case exists. 18

20 THANK YOU FOR YOUR ATTENTION Dr Emilijan Mohora, Senior Environmental Specialist Environmental, Social and Governance Department Tel: (+381) International Finance Corporation Bulevar kralja Aleksandra 86/III Beograd Tel: (+381)

IFC SUPPORT TO THE PRIVATE SECTOR STRATEGY AND INSTRUMENTS

IFC SUPPORT TO THE PRIVATE SECTOR STRATEGY AND INSTRUMENTS IFC: A MEMBER OF THE WORLD BANK GROUP IBRD IDA IFC MIGA ICSID International Bank for Reconstruction and Development International Development