“IFC is releasing this Toolkit as part of a broader effort to enhance disclosure and transparency in countries and companies we work with, either as investors or advisers. Disclosure and transparency have become increasingly relevant for IFC as the eld of corporate governance has expanded from purely board-related matters to include engagement with various external stakeholders. The Toolkit and IFC’s efforts to promote corporate disclosure and transparency more broadly are part of IFC 3.0—a new strategy that focuses on creating markets and mobilizing private capital, especially in low-income countries and FCS (fragile and conflict situations). The Toolkit builds on IFC’s Access to Information Policy, which seeks to provide accurate and timely information regarding IFC investment and advisory services activities to its clients, partners, and stake holders. Focus on Building Markets in Emerging Economies In developing countries, economic and social development is often limited by insuffiient flow of private capital. In part, this is due to a heightened perception of risk in these countries, compounded by a lack of information or transparency or limited price discovery. This Toolkit is designed to help companies in emerg ing economies access global capital markets, and to help global investors better price the risk of investing in these markets. It is also designed to help regula tors and market authorities in developing countries improve the local market infrastructure. A Comprehensive and Integrated Approach to Corporate Reporting: The Toolkit’s purpose is to guide companies in the preparation of integrated annual reports for investors. It provides guidance on the disclosure of material in formation—about a company’s strategy, governance, and performance—that will be useful in making investment decisions.
The Toolkit often goes beyond legal requirements for disclosure and transparency, looking to the next frontier of reporting on environmental, social, and governance (ESG) issues and making sure it is inte grated into the company’s strategy, culture, and risk management, and that the information is subject to independent verification and assurance. Incorporating International Best Practices: The Toolkit incorporates international best practices and standards in corporate governance, environmental and social management systems, and disclosure and transparency, including the following: • The IFC Corporate Governance Progression Matrix for Listed Companies1 (Integrating Environmental, Social, and Corporate Governance Issues) referred to herein as the IFC Corporate Governance Matrix, or the Matrix. • The IFC Performance Standards • Global frameworks for sustainability management and disclosure. Flexible Framework: The practice of disclosure and transparency is not a compliance exercise. Rather, it is a journey that takes into account a company’s size and organizational complexity. The Toolkit’s modular approach makes it applicable to a range of company sizes, organiza tional complexity, and operating contexts. For example, smaller and family-owned businesses can initially focus on the following sections: Strategic Objectives, Risk Analysis and Response, Structure and Functioning of the Board of Directors, and Financial Statements. Publicly listed and global companies should consider more compre hensive reports, with information covered in the sections on Sustainability Governance, Stakeholder Engagement, and Sustainability Statements. Toolkit Structure: At its core, the Toolkit provides a Disclosure Framework with detailed guidance, best practices, and examples in the three areas of an integrated annual report: Strategy, Corporate Governance, and Performance. The Toolkit also provides general Reporting Guidance and considerations for preparing and presenting the information—including information quality, materiality, and specicity. Primary Users of the Toolkit: The Toolkit is designed to guide emerging-markets companies in the preparation of integrated annual reports that include strategic, governance, and per formance information and that are commensurate with their size and organizational complexity and adapted to their context of operation. It can also be used by developed-markets companies looking to create sophisticated annual reports that integrate economic, social, and environmental factors.”