- The new policy responds to the evolving nature of environmental, social, and corporate governance risks, while upholding international best practices
Today, the new IDB Invest Environmental and Social Sustainability Policy (Sustainability Policy) goes into effect. The new Sustainability Policy, which was approved by the Board of Executive Directors in April 2020, replaces the institution’s 2013 Sustainability Policy. It is the result of a rigorous process that spanned two years and that included an inclusive and transparent public consultation process involving the private sector, civil society, Indigenous Peoples’ and Afro-descendants’ organizations, community representatives, the public sector and academia.
The purpose of the new Sustainability Policy is to enhance the environmental and social sustainability of IDB Invest’s financed projects and exemplifies IDB Invest’s commitment to sustainable development, as the foundation of its approach to risk management. Additionally, the Sustainability Policy will help improve the environmental and social performance of its clients through sustainability solutions and management systems that adapt to the evolving nature of risks in the region.
In its new policy, IDB Invest focuses on a single set of standards, providing more clarity regarding roles and responsibilities, and outlining new priority areas including an increased focus on human rights and stakeholder engagement, the implementation of an Engagement and Grievance Mechanism, special emphasis on reprisals, a greater focus on gender, sexual orientation and gender identity, greater protection for Indigenous Peoples particularly those in voluntary isolation, increased focus on climate change and low-carbon development, and a new approach to direct investments and financial institutions.
Moreover, the new Sustainability Policy is supported by a comprehensive Implementation Manual which describes each of the policies and standards that constitute the IDB Invest Sustainability Framework, with objectives, principles, and requirements that apply to IDB Invest and its private sector clients.
There is a growing body of evidence to demonstrate that companies that are operating sustainably and responsibly are going to have better long-term financial performance, may attract greater investments or more favorable financing terms, are more likely to attract and retain talent, are more resilient and innovative, and can count on a better social license to operate.
As a development finance institution, IDB Invest has an overall mandate to add value not just from the perspective of growth and financial returns, but also to make a positive contribution to society. The new Sustainability Policy is central to this effort.
IDB Invest remains committed to working with its clients and other stakeholders to listen and learn and continue to contribute to a shared body of good practice on environmental and social risk management on how private sector projects may contribute to development and sustainability.
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.