A Focus on Remedy and Responsible Exit

Remedy and responsible exit are critical development topics - particularly as development finance institutions (DFIs), investment banks and investors are considering approaches to address unintended adverse project impacts to communities and the environment.


Roads constructions in Lao Cai Province, Vietnam. Photo Ngan Hon Nguyen/World Bank

As the focus on remedy and responsible exit continues to grow, CAO's advisory team is working to: 

  • Inform and support operationalization of commitments by IFC and MIGA to develop a remedial action framework and an approach to responsible exit; and  

  • Strengthen CAO’s ability to facilitate access to remedy through its processes. 

  • CAO continues to develop our analyses and engagement in relation to remedy and responsible exit, particularly as IFC and MIGA, and other DFIs, develop their approaches in these areas.

    Janine Ferretti
    Director-General, CAO


Remedy centers on the principle that adverse impacts from project operations and activities on individuals, communities, workers, and the environment should be remediated. This principle is embedded in the E&S sustainability policies of DFIs. Remedy is also a core pillar of the United Nations Guiding Principles on Business and Human Rights (UNGPs). 

  • Through sharing insights and lessons from cases, this series of notes aims to inform the development of IFC and MIGA’s approach to remedial action.

    The Remedy Gap: Lessons from CAO Compliance and Beyond (April 2023) 

    • Drawing from CAO’s casework, this note explores the “remedy gap” that occurs when harm to people arising from the adverse impacts of IFC/MIGA projects is not remedied through the actions of IFC/MIGA or their clients. It highlights contributing factors and presents findings and recommendations to help IFC and MIGA close the remedy gap.

    The Role of Dispute Resolution in Remedy (February 2023) 

    • Drawing from CAO case experience, the first note in the Remedy series identifies opportunities for IFC and MIGA to support remedial outcomes for project-affected people via CAO dispute resolution processes.

Responsible Exit

Exits are a normal stage in the investment project cycle and can take place at various points during the life cycle of a client project. In a responsible exit, when an investment ends, DFIs will have achieved their commitments to do no harm, mitigate risks, and have harm remediated, in addition to meeting the aims identified for that specific investment. Exiting investments responsibly is key to good performance, as exits can significantly impact local communities and environments by limiting the investor’s ability to influence and oversee the project’s performance.

Over the last 10 years, exits occurred in 4 out of 10 CAO cases while the CAO case was ongoing.

  • The following publications aim to inform and support operationalization of commitments by IFC/MIGA to develop an approach to responsible exit.

    Responsible Exit: Insights from CAO Cases (December 2023)  

    • 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, identifies challenges, and provides a summary of CAO’s recommendations to IFC. 

    Responsible Exit: Discussion and Practice in Development Finance Institutions and Beyond (February 2023) 

    • This report highlights findings from a landscape study that explored how a range of actors frame and approach responsible exit. Study participants included development finance institutions and banking institutions, impact investors, and civil society organizations who are considering or developing policy, guidance, or practice related to responsible exit. The study presents key findings and offers conclusions on advancing responsible exit strategies for investment institutions, as well as an analysis of the study’s implications for IFC.
Featured Publication

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. This report analyzes IFC's current approach to exiting investments and provides recommendations to IFC based on the case data findings.


Informing IFC/MIGA’s Approach to Remedial Action and Responsible Exit

In response to the recommendations of the “External Review of the IFC’s and MIGA’s E&S Accountability, including CAO’s Role and Effectiveness,” IFC and MIGA prepared a proposed approach to remedial action and held a public consultation on the approach in 2023. The public consultation also included a discussion on IFC’s draft principles of responsible exit. CAO actively participated in the consultation and has continued to share feedback with IFC and MIGA to inform the development of their approaches to these topics.

As IFC and MIGA solidify and operationalize their Approach to Remedial Action and Principles on Responsible Exit, CAO will continue to provide insights and recommendations from its casework through reports, statements and consultations.

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