Tokyo, August 26, 2019—IFC, a member of the
World Bank Group, today announced that the Japan International Corporation
Agency (JICA) signed the Operating Principles for Impact Management, a
groundbreaking new set of standards for impact investing. JICA is the first
Japanese signatory to Principles.
Introduced by IFC and other impact investors
in April 2019, the Principles bring much-needed discipline, transparency,
and credibility to the impact investing market. They require signatories
to assess and monitor not only their financial returns, but the progress
of their investments in achieving impact. Signatories commit also to independent
verification of their impact systems, which provides greater transparency
on how impact funds are managed and boosts investor confidence.
As more investors look to align their strategies
with the Sustainable Development Goals, impact investing is gaining prominence
as a way to achieve both financial returns while addressing global and
local issues like poverty, inclusion, education, employment, and health.
IFC estimates that the current size of the impact investing market is relatively
small at $813 billion, but that the potential market could be as high as
“Impact investing has the potential to raise
trillions and help fill the funding gap to address the world’s most pressing
development needs,” said IFC CEO Philippe Le Houérou. “JICA’s adoption
will push impact investing further into the mainstream and sends a positive
signal to Japanese companies and investors at a time when they are meeting
at the Seventh Tokyo International Conference on African Development.”
According to JICA, by adopting the Impact Principles, the agency aims to
share the knowledge of its Private Sector Investment Finance operations,
which contributes to economic growth, poverty reduction and combats against
climate change in developing countries, with IFC and other signatories
of the Principles, and expects that other Japanese financial institutions
are encouraged to adopt the Impact Principles.
“JICA’s Private Sector Investment Finance operations have practically
embraced the concept of the Principles, and I am confident that JICA, through
our adoption, can cooperate with IFC and other signatories for further
development of the Principles.” Shinichi Kitaoka, President of JICA said.
“I strongly expect that other Japanese financial institutions are encouraged
to become signatories of the Principles, inspired by JICA’s adoption of
the Principles as the first Japanese institution.”
IFC worked with a group of the world’s leading
impact investors, including asset owners, fund managers, investment banks,
and development finance institutions to develop the Principles. JICA brings
the total to 69 investors that have signed on to the Principles.
JICA is an incorporated administrative agency
with more than 100 Overseas and Domestic Offices, in charge of administering
Japan’s ODA, such as Technical Cooperation, ODA Loans, Private Sector
Investment Finance, Grants and so on, supporting socioeconomic development
in developing countries. Private Sector Investment Finance aims to stimulate
economic activity and improve the people’s standard of living in developing
countries through equity investments and loans for projects undertaken
in developing countries by the private sector. For more information, visit
IFC—a sister organization of the World Bank
and member of the World Bank Group—is the largest global development institution
focused on the private sector in emerging markets. We work with more than
2,000 businesses worldwide, using our capital, expertise, and influence
to create markets and opportunities in the toughest areas of the world.
In fiscal year 2019, we delivered more than $19 billion in long-term financing
for developing countries, leveraging the power of the private sector to
end extreme poverty and boost shared prosperity. For more information,
1: Combined $71 billion in private impact
funds with $742 billion invested for impact by development finance organizations.
Source: “Creating Impact: The promise of Impact Investing” (published
by IFC in April 2019, available at https://www.ifc.org/creatingimpact)