42. Orlando Ferreira on Supporting Change Through Multilateral Development Finance

Purpose and Profit with Kathy Varol

Orlando Ferreira is the Chief Finance and Administration Officer of IDB Invest, a multilateral development finance institution owned by 47 member countries. 26 members are in the Latin American and Caribbean region where IDB Invest finances projects to advance clean energy, modernize agriculture, strengthen transportation systems, and expand access to financing.

In 2021 the multilateral bank issued $1.6 billion in sustainable debt, including a $50 million blue bond for a remediation and preservation project—the first such blue bond in Latin America and the Caribbean. A blue bond is a relatively new form of sustainability bond that is issued to support investments in healthy oceans and marine economies.

Orlando is a national of Paraguay. He served as a member of the Board of Executive Directors of the IDB Group from 1999 to 2005, then joined the organization as a Senior Adviser to the CEO in 2006 and later held several Division Chief positions including Chief Operating Officer of the IIC (now IDB Invest), and Chief Strategy Officer for IDB Invest.

In this episode we discuss:

✅ What a multilateral development finance institution is

✅ New types of bonds that are supporting the United Nations Sustainable Development Goals (with an interesting example of a Gender Bond IDB Invest issued)

✅ The evolution of measuring social and environmental impact (metrics, metrics, metrics)

Key Takeaways:

• One thing I find remarkable about Orlando (that shows up consistently throughout this conversation) is how humble and transparent he is as a leader. There is no doubt he knows his stuff and is good at what he does, but he doesn’t pretend to know it all. Instead, he shares openly lessons learned, areas they are still trying to figure out and improve, and new approaches they’re trying to create that might be better. He knows that the path of improvement is never static. There is no finish line we’ll finally reach. But instead, the objective is to acknowledge that progress isn’t perfect and to humbly strive to improve year after year. These are the leadership traits that create psychological safety, and ultimately the environment for real progress.
• There are lessons we could all learn from the way multilateral organizations operate. While adopting a mandate to no longer be able to compete wouldn’t work in capitalism, consider how the world would be different - how your industry and company would be different - if you had a mandate that the only way to compete in the market is by adding more value. You couldn’t launch a new product or business if it didn’t add material value to consumers’ lives, the planet, or society. Instead of using marketing to create perceived differentiation, what if you were only allowed to create actual differentiation through value creation? Which would actually be a sustainable type of differentiation.
• Another thing that struck me was the intentional role of knowledge sharing that IDB Invest does. If they realize they aren’t the right institution to step in, they provide the knowledge they have to the right institutions. This is a beautiful mix of leveraging both a competitive advantage (which means a condition or circumstance that puts a company in a favorable or superior position) and a collaborative advantage. IDB Invest is recognizing who has the competitive advantage to create real change, and then supporting them through a collaborative knowledge share. What if this type of knowledge sharing was more widespread and intentional? Not just with partners in your own supply chain, but taking accountability to share information that might help institutions that don’t make a direct (or even indirect) impact on your business, but could make an impact on society or the world. In business this would mean no longer trapping yourself in purely transactional interactions where you get something in return. Afterall, diverse perspectives spark some of the most innovative ideas. What would it feel like to start sharing outside perspectives regularly and taking pride in helping another organization move in a better direction? An added benefit to adopting this approach is that creativity is a muscle—the more your workforce opens their mind to all creative ideas, the more creative they’ll be for your company as well.

References:

• Connect with Orlando on LinkedIn
• IDB Invest
• 2022 Sustainable Bond Program: Allocation and Impact Report
• Banistmo (es)
• FMO: Entrepreneurial Development Bank
• SinDesperdicio (es)

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