As the private sector arm of the IDB Group, IDB Invest is leveraging decades of experience as an impact investor to serve as a gateway to SDG impact in Latin America and the Caribbean.
IDB Invest’s mandate is to maximize development impact while maintaining financial sustainability, a two-sided objective shared with many impact investors. To crowd in private capital, we offer our strong capacity to select and structure projects with the greatest impact potential, manage ESG risks, and build a strong pipeline of SDG-enabling investment opportunities in the region.
As a member of the IDB Group, we can also leverage the IDB’s public policy and regulatory expertise, as well as IDB Lab’s capacity for building innovation ecosystems and financing inclusive early-stage ventures.
As the appetite for impact continues to grow and more investors adopt the impact label, it is increasingly important to converge around a shared understanding of what it means to invest for impact. It is one thing to integrate ESG factors into responsible investment decision-making as a screening tool, and another to intentionally pursue investments with the purpose of generating a net positive, measurable social or environmental impact alongside financial returns. To address this challenge a group of MDBs, DFIs, banks, impact asset managers, asset owners, and industry associations, including IDB Invest developed the Operating Principles for Impact Management.
The Principles provide a framework to guide investors on the integration of impact considerations throughout the investment lifecycle. As a signatory to the Principles, IDB Invest publicly discloses, on an annual basis, the alignment of our impact management systems with the Principles and, at regular intervals, arranges for independent verification of this alignment. The following documents are IDB Invest’s disclosure statement and an independent verification of alignment provided by the IDB Group’s independent Office of the Executive Auditor.
- Disclosure Statement: Operating Principles for Impact Management - April 2020
- Disclosure Statement: Operating Principles for Impact Management - April 2021
- Independent verifier's limited assurance report on the alignment of IDB Invest with the Operating Principles for Impact Management - April 2020
IDB Invest’s Impact Management Framework is an end-to-end series of tools and practices that support the complete project lifecycle and integrate impact and financial considerations into portfolio management. In short, it allows us to build, measure, and manage a portfolio of financially sustainable investments that contribute to reaching the Sustainable Development Goals (SDGs). While our focus is on Latin America and the Caribbean, our framework is region and sector agnostic. It can be adapted to the strategic, geographic, sectoral, and other priorities of other MDBs, DFIs, and impact investors. It is fully aligned with common market practices, such as the Impact Management Project’s five dimensions of impact.
OUR ASSESSMENT TOOLS
The DELTA Tool (for Development Effectiveness Learning, Tracking and Assessment), which has set a new benchmark for other organizations committed to development tracks each project at every step of the project cycle. It allows us to standardize how we score and analyze different aspects, such as:
- How well does the project align with the IDB Group’s development priorities?
- What are the potential economic returns for IDB Invest and for the client?
- To what extent will the project produce social benefits?
- How can its development impact be accurately assessed and verified?