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Wednesday, December 12, 2012

Sustainable Finance 2.0 – Application to Capital Markets

While it is beyond the scope of the EP and EP III, some EPFI have also voluntarily begun to apply the IFC Performance Standards and EP approach in capital markets and underwriting contexts. The objective in doing so is to facilitate proper disclosure of sustainability issues to the market prior to listing, to meet market expectations.

There may be an inherent tension between these objectives and competing legal considerations about market disclosure. To be successful, the right balance needs to be struck through cooperation between strategic business and legal advisors, to tell the story of the listing company and make the case for sustainability to the market.

This is an area that continues to evolve but reflects the increasingly pervasive use of non-state frameworks for sustainability management in finance.  The IFC Performance Standards can be used as a tool to help listing companies make the "sustainability case" to the market when raising equity capital.

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