Dubai, UAE, January 13, 2010 - IFC,
a member of the World Bank Group, is helping develop an index that will
encourage responsible and sustainable investment practices in the Middle
East and North Africa by measuring the environmental, social, and corporate
governance performance of hundreds of listed companies in the region.
IFC is supporting efforts of the Hawkamah
Institute for Corporate Governance, indices and ratings provider Standard
& Poor’s, and Credit Rating and Information Services of India Ltd.
(CRISIL) to develop the Environment, Social and Governance (ESG) index,
the first of its kind to be launched in the region.
The index will help some 600 listed
companies in 11 countries better understand environmentally and socially
responsible investment practices, and the importance of implementing sound
corporate governance. Businesses that seek balanced, long-term performance
will be encouraged to adopt sustainable business practices.
Dr. Nasser Saidi, Executive Director
of Hawkamah, said: “In response to economic disruption and to bad practices
blamed for sparking the financial crisis, institutional investors are increasingly
focusing on long-term risks in their investments. Environmental, social,
and governance factors are playing a growing role in investment decisions
in our region. Financial performance indicators have traditionally marked
whether to invest in a company. With IFC’s support we aim to provide the
market and investors with a tool focusing on non-financial indicators,
which are fundamental in assessing the sustainability of a company’s
IFC’s Associate Director, Gulrez Hoda,
said, “The absence of credible and standardized data about business practices
relating to social and environmental concerns is a key barrier limiting
the flow of socially responsible investing funds to emerging markets. Better
social, environmental, and governance practices will ease the flow of funds
into ethically responsible products.”
The index will cover the United Arab
Emirates, Saudi Arabia, Qatar, Bahrain, Oman, Kuwait, Jordan, Egypt, Lebanon,
Morocco, and Tunisia and provide qualitative information for investors’
sustainability needs, absorb high liquidity growth, and reduce volatility
of stock markets.
The project will strengthen and promote
environmentally-sustainable, and socially- responsible businesses. In
turn, this will create greater awareness and adoption of ESG practices
by companies as well as increase available financing options.
This ESG index is part of IFC’s partnership
with Hawkamah to promote better corporate governance in the Middle East
and North Africa. IFC and Hawkamah have been working on advancing corporate
governance in the region to help build capital markets and attract capital
and foreign direct investment.
IFC, a member of the World Bank Group creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $14.5
billion in fiscal 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.
Hawkamah is the first Corporate Governance
institute in the MENA region with a mission to promote corporate sector
reform and good governance, assist the countries of the region in developing
and implementing sustainable Corporate Governance strategies adapted to
national requirements and objectives. They aim to become a central
source of technical assistance, advisory services, monitoring, analysis,
research, consultation and reform.