Posts Tagged ‘IFC’
CSR Social Research Digest – April 2013
International Financial Corporation in partnership with the ministry of Foreign Affairs of the Netherlands and World Bank Group released a report that examines how and under what conditions the private sector can best contribute to job creation and poverty reduction. The “IFC Jobs Study: Assessing Private Sector Contributions to Job Creation and Poverty Reduction” is a result of an open-course study to assess the direct and indirect effects of private sector activity on job creation and it relies on surveys of more than 45,000 businesses in over 100 countries.
- The world is facing a jobs challenge where 600 million job must be created by 2010 within the context of where informality and working poverty are rampant.
- Private sector, which provides nine out of 10 jobs in developing countries, holds the answer to this challenge.
- There are four constraints to job creation:
- Poor investment climate
- Inadequate infrastructure structure
- Lack of access to finance
- Insufficient skills and training
- There are specific types of interventions that are the most successful in removing the main obstacles to job creation:
- Establishing a friendly investment climate to promote job creation by the private sector
- Improved services that result form the new infrastructure can generate far larger number of jobs
- One of the ways to improve private companies’ access to finance and financial services, and it depends on the degree of development of the local financial sector.
- Some reforms or programs and the jobs created have a transformational impact on an economy
- Example: the strengthening of local suppliers and distributors in agribusiness and manufacturing can reduce poverty.
- A comprehensive approach is needed to tackle the lack of more advanced skills and future employment needs.
International Finance Corporation
Governance Research Digest – February 2013
IFC’s Vietnam Corporate Governance Project and the Global Corporate Governance Forum (GCGF) produced the third Corporate Governance Scorecard monitoring CG standards and practices in Vietnamese companies. Vietnam’s 100 largest publicly listed companies, representing more than 80% of the combined market capitalization on the Hanoi (HNX) and Ho Chi Minh (HOSE) stock exchanges, were assessed against five areas recognized by the OECD as keys to good corporate governance.
- All CG scores were below 60%, with an average score across all companies of 42.5%
- Company disclosure declined, particularly in regard to board and SB activities. Area D, Disclosure and Transparency, declined by 3.1% compared to 2010’s results. Reported information was generally lighter and more superficial than previously observed.
- Also, information related to stakeholders was noticeably poorer. Area C, the Role of Stakeholders, comparatively declined by a significant 6.7% against 2010’s results. In difficult economic times companies seemed to not consider, not do as much previously or not report on activities regarding employees, the environment, the community and in relation to working conditions, health and safety.
- Furthermore in 2011, the SSC was more active in monitoring and enforcing regulations and announcing violations to the market. As a result, more negative information about companies was available and regulatory challenges to related party transactions and to financial statement information were evident.
- Some 25 companies, new to the Scorecard 2012, underperformed against the average score, particularly in Area D, Disclosure and Transparency and Area E, the Responsibilities of the Board. These companies’ average CG score was 38.7%, against the overall average of 42.5% for all 100 companies and less than the average CG score of 43.8% for the remaining 75 companies reviewed last year.
- Some 22 of the 25 companies were newly listed and they seemed ill-prepared for the responsibilities that come with listing, particularly an awareness of corporate governance practices, adherence to stricter reporting requirements and understanding and fulfilling expected board responsibilities.
International Finance Corporation and the Global Corporate Governance Forum in collaboration with The State Securities Commission of Vietnam
Social Research Digest – September 2012
A new report from IFC breaks new ground by estimating the market for energy services offered at the household level to low-income people. It profiles companies with innovative business models and explores in detail what it takes for them to succeed.
- There is a $37 billion opportunity for the private sector to improve energy services for people who live in relative poverty.
- With the right business models and conditions—the private sector can play a vital role in providing energy solutions that are better for people’s health and better for the environment.
- Private enterprises have started to seize the opportunity.
- While this is still a nascent sector, many businesses are rapidly moving beyond being cottage industries and are successfully serving tens of thousands to hundreds of thousands of customers.
- Some companies are seeing profit margins of 10 percent to 30 percent, often with fairly small subsidies on capital costs or no subsidies at all.
- To scale up successful business models, the report offers a series of recommendations for key stakeholders—including companies, social and commercial investors, governments, policymakers, and donors.
- For instance, it suggests that governments resist give-away programs and unrealistic promises, remove discriminatory taxes on energy access products, and leverage public-private partnerships and smart subsidies for extending electricity grids.
- For investors seeking both social impact and financial returns, the report recommends that they keep investment mandates broad and beyond a single technology, develop a local presence, provide appropriate funding for each part of the business life cycle, support enterprise development and business model refinement, and fund the provision of public goods.
Social Research Digest – July 2012
The IFC released a policy note on inclusive business at the recent G20 Summit in Mexico. The IFC’s policy note describes how public policy can support inclusive business models and recommends how governments and institutions can support companies.
- Despite promising inclusive business initiatives, companies require support of government, as well as greater governance, to extend the reach and impact of inclusive business models.
- The policy note describes how public policy can support inclusive business models, for instance implementing regulations that provide structure without stifling innovation.
- It also describes the institutional frameworks that define the environment in which businesses operate in a given country – for instance, legal systems, infrastructure and skilled resource.
- The document includes analysis of a survey among 167 applicants for the G20 challenge on inclusive business innovation.
- The survey identified specific regulatory hurdles companies face and recommendations for creating a business environment conducive to inclusive business.
- These recommendations include the suggested role of governments, donors and financial institutions to help companies effectively create and manage inclusive business models.
International Finance Corporation (IFC)