Responsible Exit: Insights from CAO Cases

Summary

The Advisory Note “Responsible Exit: Insights from CAO Cases” is part of CAO’s series on remedy and responsible exit and aims to inform the International Finance Corporation’s (IFC) evolving approach to responsible exit. Exiting investments responsibly is key to good environmental and social performance, and the topic is generating growing interest among development finance institutions, impact investors, investment banks, and other investors.

This report analyzes IFC’s current approach to exiting investments through the lens of complaints and cases handled by CAO over a decade – from fiscal years 2013 to 2022. The analysis highlights shortcomings in IFC’s current approach and identifies challenges that restricted IFC’s ability to adhere to its commitments in its Sustainability Policy. This Note also finds that exits during active CAO cases are common, and explores the associated significant implications for IFC’s management of risk, for CAO accountability processes, and ultimately for providing remedy to project-affected people. Finally, the report provides a summary of CAO’s recommendations to IFC, based on the case data analysis.