By Rogers Aghan, March, 16, 2023, UN Agency IFAD becomes a voting member of the ICMA principles, providing investors with another reason to bank on rural development
The International Fund for Agricultural Development (IFAD) has earned its place as a voting member of the International Capital Markets Association(ICMA) principles. The UN specialized agency can now contribute to securing and influencing the highest international standards and transparency in administering and managing ESC bonds.
As an environment, social, and governance (ESC) bond issue is recognized as an international financial institution that had since been an observing member of the ICMA principles.
Besides complying with the sustainability Bond guidelines and its four core components IFAD stands an opportunity to gain an understanding of the qualities that are critical for transparent and sound ESG debt instruments, and the vast effect reporting that is necessary to avoid “greenwashing” 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.