The World Bank Group’s private sector arm, the International Finance Corporation (IFC), launched a review of its Sustainability Framework in 2025. This marks the first update since 2012 to the policies governing projects financed by IFC across its global portfolio. The review will revise the Sustainability Policy, which defines IFC’s own environmental and social responsibilities in its investments; the Performance Standards, which establish the environmental and social requirements IFC clients must meet during project implementation; and the Access to Information Policy.
With the initial dialogue phase of the review concluding, IFC teams are preparing a first draft of the updated Sustainability Framework, incorporating input received from across the institution as well as external stakeholders, including civil society organizations. With the ongoing shift toward a One World Bank approach, IFC is also seeking to align closely with the World Bank’s public sector policies, including the Environmental and Social Framework.
Throughout the dialogue phase, BIC engaged with IFC’s teams across key portfolios – including stakeholder engagement, child rights, climate, biodiversity, disability, gender, resettlement, labor, and access to information – while submitting collaborative written recommendations on PS1 and stakeholder engagement, PS3, PS5, PS6, and the Access to Information Policy.
In the forthcoming draft of the new Sustainability Framework, BIC hopes to see:
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- Specific provisions for marginalized groups across the Framework. The Framework must include a definition of marginalized groups, identify the groups included under that definition, and acknowledge the distinct risks, barriers, and needs each group faces. The Performance Standards should include strong provisions to identify and prevent harm to each group. They should also require measures to facilitate the active, targeted inclusion of marginalized groups in stakeholder engagement processes and address barriers that limit their access to project benefits.
- Gaps filled on SEA/H and GBV: In the past decade, the World Bank Group has acknowledged harms to children resulting from projects it has financed by both its public and private sector sides, and has taken steps to strengthen its approach. The Sustainability Framework review presents an opportunity to incorporate lessons learned, and establish clear requirements for prevention, response, and reporting mechanisms related to sexual exploitation, abuse, and harassment (SEA/H), including specific measures to protect children, across IFC projects.
- Modernized climate provisions that reestablish IFC as an industry leader. The climate provisions in the Performance Standards should be updated to reflect developments and evolving best practices in the field. This includes mainstreaming climate considerations across the Performance Standards, strengthening greenhouse gas emissions reporting and accounting transparency, and requiring more rigorous assessments — including robust baselines, transparent methodologies, and comprehensive accounting across value chains, including Scope 3 emissions — for high-emitting sectors such as energy and transport. These measures are critical to supporting decarbonization under the principles of a just transition.
- Strengthened biodiversity protection and land-use safeguards. To reflect lessons learned from problematic projects such as Arauco Sucuriú and Sal de Vida, IFC should strengthen protections for sensitive ecosystems; this includes establishing clearly defined no-go areas for critical and unique habitats, and prohibiting biodiversity offsets. The Framework should require robust baseline, cumulative impact, and landscape-level assessments, while closing loopholes that permit harmful economic activities and land conversion in protected and mix-use areas, including industrial forestry and livestock production agriculture.
- Lessons from guidance and practice incorporated into policy on reprisals. IFC has made progress by committing to zero tolerance for reprisals, using contextual risk assessment to identify reprisal risks, and developing guidance for clients on responding to reprisals in project contexts. The Framework should codify these commitments and lessons learned in the updated requirements.
- Strong stakeholder engagement requirements for all projects. The World Bank Group and its peer institutions acknowledge that meaningful engagement with stakeholders builds trust and ownership, and contributes to improved project outcomes. Stakeholder engagement should be a foundational component of all IFC-financed development projects; the Performance Standards should require clients to identify project stakeholders, develop and implement plans for regular, accessible engagement throughout the project lifecycle, demonstrate Broad Community Support, and publicly report their responses to community input and concerns through changes to project design and implementation.
- Clearly defined leverage and responsibility for IFC to hold clients to compliance with policy requirements. Policies are only as strong as the institution’s capacity and commitment to see clients implement them in practice. BIC’s project monitoring has identified significant gaps between policy and implementation, particularly within the World Bank Group’s private sector investments. As it shifts to a more integrated One World Bank approach to risk management, the Bank should critically assess the factors and incentives that drive effective implementation and policy compliance, and incorporate those lessons into the updated Framework.
IFC has an opportunity to position itself as an industry leader and standard-setter, and we look forward to reviewing a strong initial draft that retains and strengthens existing policies, avoids regressing on previous commitments, incorporates lessons learned from project experience, and harmonizes upward to meet — and ultimately exceed — the standards of peer institutions. We also hope to see a robust and inclusive consultation process in the second phase of the process, with targeted outreach that facilitates participation and input from a broad range of stakeholders, including industry experts, civil society organizations, and project-affected communities.
