Submitted by: International Finance Corporation
Posted: Apr 05, 2006 – 12:00 AM EST
IFC's Capturing Value program invites research houses, rating firms, index providers, and similar organizations to compete for grants of up to $500,000. The grants will support development of new information services geared to sustainable and responsible investment in developing country firms. By making better information available, the goal is to facilitate an increase in high-quality, long-term investment in emerging markets from pension funds and other investors worldwide.
Although socially responsible investment - broadly defined - totals about $2.7 trillion globally, research commissioned by IFC in 2003 suggests that only 0.1 percent of this capital is invested directly in emerging market listed equities.
"We know that more and more investors are keen to invest in the emerging markets. They are seeking listed companies that are well-governed and that manage environmental risks, treat workers well, are good neighbors to local communities, and understand customers' expectations on corporate social responsibility," said Rachel Kyte, Director of IFC's Environment and Social Development Department. "But these investors currently lack cost-effective, reliable information on how emerging market firms perform against such criteria. The research infrastructure is not in place to encourage socially responsible investment in the emerging market asset class."
The competition is open to a wide range of organizations, from mainstream sell-side analysts who want to deepen their expertise and product offering, to more specialized firms that cater to socially responsible and ethical investors in the market. "This competition challenges the market to come up with commercial ideas on the best way to provide good research," commented Kyte.
The deadline for interested parties to submit technical and cost proposals is June 30, 2006. IFC will announce the winner(s) of the competition end of September. Winning proposals will be selected by IFC and a six-person panel of independent experts drawn from the UN Global Compact, First State Investments, the World Resources Institute, the World Federation of Exchanges, the Association for Sustainable and Responsible Investment in Asia, and OnValues.
The funding for this initiative is provided by IFC and the governments of Italy, Luxembourg, the Netherlands, Norway, Switzerland, and the United Kingdom through IFC's Sustainable Financial Markets Facility. The program builds on IFC's work last year to help Bovespa, the Sao Paolo stock exchange, launch a sustainability index for the Brazilian market.
Information on the grant competition, proposal form, and key deadlines can be found on the IFC website at: http://www.ifc.org/ifcext/enviro.nsf/Content/SFMF_RFP_Emerging MarketEquities
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.
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