The effects of COVID-19 have already been staggering, particularly on vulnerable people. The crisis once again exposes the inequalities of our social and economic systems, with poor and disadvantaged people being disproportionally hit by COVID-19, and existing inequalities further exacerbated by the impact of the pandemic.
The challenge of rebuilding a more equitable, inclusive and sustainable economy and society, beyond the immediate crisis response, is enormous and will require billions of pounds of investment. It is therefore encouraging that momentum is gaining across investors and investor networks to contribute to this broader recovery effort.
But capital and good intentions will not be enough to ensure that investment is directed to addressing some of the most pressing of social issues we see accentuated by the current crisis. Be it the need for mental health support, or support for those who are seeing their jobs and livelihoods threatened or fall away amidst the crisis and recession to come. We all know that.
What we need are shared, robust impact management standards and practices to back up our impact intentions, and a system for holding us accountable in terms of how we are applying these standards. We believe the IFC Operating Principles – a set of common standards for disciplined impact management – offer a framework that addresses this critical need. And this is why we decided to support the Principles as a Signatory at the end of March this year.
Introduced by the International Finance Corporation (IFC) and a number of institutional investor and asset managers in April 2019, 94 institutional investors and asset managers have adopted the Principles to date, managing an estimated USD 300 billion in impact assets. The Principles lay out the key elements of good impact management along the entire investment cycle and require Signatories to disclose annually how they implement these Principles. Importantly, such disclosure statements require independent verification on a regular basis to ensure Signatories are living up to their claims.
We believe that such transparency and openness about our respective impact management practices will not only lead to much-needed accountability across the sector, but it will also help us to continuously learn and deepen our collective understanding of what constitutes best practice in impact management.
The bar for what constitutes such best practice will continue to evolve over time, but establishing those underlying standards provides an important first step upon which the broader sector can continue to develop.
We are excited to join the IFC Operating Principles this year, but it is hopefully the many people whose lives we seek to improve through our investments that will benefit the most.