“ The fund focuses on accelerating

progress toward achieving the targeted six SDGs (SDGs 2, 3, 4, 6, 7 and 9), on food security, healthier lives, inclusive and equitable education, sustainable management of water and sanitation, access to affordable and clean energy, and sustainable industrialization across the developing world. All these goals comprise direct and indirect environmental concerns. SDG 6 and 7 are clearly marked for environmental significance, which is also addressed by some aspects of SDGs 2, 3 and 4, such as sustainable food production (SDG 2, target 4), reducing environmental hazards such as air, water and soil pollution and contamination (SDG 3, target 9) and promoting education skills for sustainable development (SDG 4, target 7). SDG 9 aims to guide the vision of a sustainable, resilient and resource- efficient industrial framework by striking a balance between innovation and environmental concerns. Since launch, the Transform Fund has

steadily invested in innovative projects working within the peripheries set by these SDGs, enabling ambitious ideas with clear potential to contribute to the environment. As of 2020, IsDB Engage has powered 65 projects worth US$10 million – an investment made well to uphold the environmental concerns in developing countries. Moreover a US$7 million investment in the pipeline is soon to be released to support current and upcoming projects. As another example, IsDB and the

International Federation of Red Cross and Red Crescent National Societies (IFRC) have set themselves the ambitious objective of contributing to the reduction of cholera-related deaths by 90 percent in the most affected Organization of Islamic Cooperation (OIC) states, over the next 10 years. This objective contributes not only to SDG 6 (clean water and sanitation) but also SDG 3 (good health and wellbeing) and SDG 13 (climate action). To achieve this vision, IsDB and IFRC are creating a multi-million dollar fund (the One WASH Fund) to combat cholera and other diarrheal diseases as part of the Global One WASH Initiative, targeting 40 cholera hotspots globally. Specifically, the One WASH Fund will finance One


At the IsDB, we continue to ensure that all our development co- operation activities and programing adequately consider and prioritize ESG issues to drive sustainability through our investments.

WASH Programs in 29 OIC member states where it aims to impact the lives of five million people by strengthening and integrating the delivery of water, sanitation, and hygiene (WASH) with health services, building on proven methodologies practiced by the IFRC at the grass roots level. In addition to direct positive impacts on health, the initiative will contribute to the protection of surface and groundwater resources by promoting the use of environmentally sound sanitation facilities for human waste disposal. It will also support water conservation (prevention of wasteful water use practices and losses) and enhance the basic knowledge, skills and behaviors of rural communities, as well as social and cultural activities concerning health, lifestyles and environmental awareness. In September 2019, UNICEF and IsDB launched an innovative fund called the Global Muslim Philanthropy Fund for Children (GMPFC). This opens new opportunities for Muslim philanthropy to reach the 89 million children currently in need of humanitarian support and helps to achieve the SDGs. The fund will enable the partners to provide many more of these children with access to safe and clean water, nutrition, education, health and protection. GMPFC is the first fund focused on Muslim giving launched by a United Nations organization together with an MDB. Its unique design allows multiple forms of Muslim philanthropy, including obligatory giving such as Zakat, and voluntary giving such as Sadaqah donations and Waqf endowments, to contribute to emergency response and development programs.

OFQ: More generally, how can the development community better address ESG and communicate about it – where should the focus be? BMHH: More than at any other time, the development community is positioned to better address ESG. The global community has worked hard to establish workable frameworks including the SDGs, the Paris Agreement and other development-focused initiatives that provide the bedrock upon which the development community can drive ESG objectives and goals. That said, it is important to remember that a US$2.5 trillion annual financing gap stands in the way of the SDGs, which has now only been further exacerbated by the coronavirus pandemic. The global community must take this moment – with this impending deadline – to reassess the right financing tools that can help us achieve these goals. The need for governments, financial institutions and the private sector to focus on social development has never been of greater importance. Therefore, to better address ESG

issues, development stakeholders should endeavor to commit to: ESG strategies with explicit strategic priorities, policy commitments and targets; stakeholder coordination through increased partnerships on ESG issues; participation and inclusiveness involving different groups such as private sectors and civil society organizations; and increased emphasis on ESG capacity development, tools, results, transparency and reporting.

OFQ: What are the main ESG-related challenges and opportunities of investing in developing countries? BMHH: The opportunities offered by ESG in developing countries are quite significant and supporting ESG is the only way to build truly sustainable development in these countries. ESG offers opportunity to develop robust and resilient investments, resource efficiency, and inclusiveness for all groups (including minority and vulnerable groups) in the development process. It also allows the Bank to increase its environment-friendly and socially responsible investments in developing countries.

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