CAF adheres to impact investing principles
Featuring representatives from 60 investment agencies, the International Finance Corporation launched the nine principles that will guide a common framework for making investments with a high development impact.
These principles are conceived based on the need for greater transparency, credibility and discipline in the impact investing market. The group of entities that ratified the nine principles include corporate institutions, investment funds, multilateral agencies, development banks, among others.
Luis Carranza Ugarte, President of CAF, noted that “these principles will empower us as fund managers to look at the impact of funds beyond the financial aspects, enabling a more holistic understanding in our role as a development bank. In addition, Elizabeth Martinez, Director of Equity Investments at CAF, emphasized “the commitment of the institution and its adherence to these principles. This is expressed in CAF’s goal of achieving greater and better alignment between the investments in which it participates and projects that have an impact on Latin America’s development.”
The principles have been drafted considering two basic notions: (i) core elements of a robust impact management system, and (ii) transparency of signatories’ alignment with the principles. The principles were designed to be implemented in various projects managed by investment agencies in different areas such as social, economic, environmental, alongside a financial return. The impact investing market is estimated at around US$26 trillion, which means that there are opportunities to turn these investments into contributions to sustainable development.
The 9 principles are intended merely as a reference for the almost 60 original signatories and for all who wish to join. They provide guidance on the premises that must be met in designing and implementing management systems for investments with an impact on development. Each institution may freely develop their own set of instruments, schemes or indicators depending on the types of investment, institution, portfolios, etc. that they manage.
Currently, CAF has a equity investment portfolio with projects that have an impact on sectors such as infrastructure, financial services, energy, agribusiness, health, among others. Thus, CAF continues to ratify its commitment to social and economic well-being in Latin America, by supporting the development of the private sector of the region.
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