The International Fund for Agricultural Development (IFAD), a UN specialized agency and an international financial institution, has become a voting member of the International Capital Markets Association (ICMA) principles, enabling IFAD, as an environment, social and governance (ESG) bond issuer, to actively contribute to influencing and securing the highest international standards and transparency in issuing and managing ESG bonds.
In addition to complying with the Sustainability Bond guidelines and its four core components, IFAD had so far been an observing member of the ICMA Principles, gaining a solid understanding of the qualities that are essential for sound and transparent ESG debt instruments, and the in-depth impact reporting that is needed to avoid "green washing" in capital markets.
"IFAD is committed as an ESG issuer to uphold the highest international standards and guidelines proposed by ICMA, seeking to become a solid and attractive investment option to contribute to rural and agricultural development," said Natalia Toschi, Head of Funding at IFAD's Treasury division.
IFAD will further engrain these principles and its core components in its own yearly funding program, reassuring investors that they will uphold ICMA standards and transparent impact reporting on its issuances on a portfolio-based approach.
In 2022, IFAD joined the ranks of ESG issuers with two private placements for a total amount of US$150 million. The bonds were issued under IFAD's Sustainable Development Finance Framework (SDFF) that was launched earlier in 2021. The SDFF abides by ICMA's four core components: Use of Proceeds, Process for Project Evaluation and Selection, Management of Proceeds and Reporting.
The SDFF also links IFAD's work to the United Nation's 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs) by supporting 16 out of 17 SDGs. As the leading global development organization dedicated exclusively to eradicating poverty and hunger in rural areas, IFAD plays a critical role in achieving the Sustainable Development Goals (SDGs) by 2030.
