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IFC Launches AI Tool for Sustainable Investments

MALENA from IFC leverages artificial intelligence (AI) to transform environmental, social, and governance (ESG) analysis for emerging markets and facilitate sustainable investments.

IFC Launches AI Tool for Sustainable Investments

The International Finance Corporation (IFC), a member of the World Bank Group, has announced the release of the AI-powered MALENA tool able to transform complex, unstructured ESG information into actionable insights for sustainable investments.

The new service will enable IFC customers to easily extract meaningful ESG insights from dense reports and news. It is especially important for investors in emerging markets where ESG data are scarce because of limited disclosure regulations and missing coverage by data providers. MALENA aims to fill these data gaps, empowering investors with transparent and speedy decision-making tools to support their sustainable investment strategies.

Users can upload documents to the MALENA site and view relevant outputs like greenhouse gas emissions, gender data, and sentiment insights in a structured and simplified manner. The organisation claims that the tool can identify over 1,000 ESG terms and predict sentiment with 91% accuracy.

“MALENA is more than a technological advancement; it’s also a catalyst for sustainable investment in emerging markets. By equipping investors and analysts with this tool, we’re enhancing their ability to make informed decisions and contribute to meaningful, sustainable development.”

Emmanuel B. Nyirinkindi, IFC’s Vice President of Cross-Cutting Solutions

He also added that MALENA would be publicly available to everyone, which aligns with the organisation’s vision of fostering responsible investment practices. The global accessibility of the tool demonstrates IFC’s ongoing commitment to bridging data gaps in emerging markets, states Nyirinkindi.

Before the public launch, MALENA was tested by Amundi and New Development Bank as well as an export credit agency and a capital markets regulator. Its development was supported by the Danish International Development Agency, South Korea’s Ministry of Economy and Finance, the Facility for Investment Climate Advisory Services, and other donors.

Earlier this year, IFC partnered with the National Bank of Cambodia to support climate-friendly projects. In this country, like in many emerging markets, green finance potential is still untapped, due to several regulation issues. For example, Cambodia still lacks clear guidelines as to what qualifies as green finance. Moreover, local firms need more transparent reporting and disclosure requirements on green lending and environmental, social, and governance (ESG) risks.

With the help of ‘smart’ tools like MALENA, green financing initiatives in similar markets will receive another boost. By making ESG data analysis more accessible and efficient, MALENA empowers developing economies to meet the UN Sustainable Development Goals and improve the state of the environment.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.