Publish What You Fund Evidence for IDC Inquiry: Investment for development: The UK’s strategy towards Development Finance Institutions.


The following evidence addresses the below question:

How are the decisions of BII’s management scrutinised? What transparency is there over BII’s performance monitoring and reporting?



British International Investment (BII) is insufficiently transparent to the extent that it is not possible for stakeholders to access key information about the organisation’s operations. This lack of transparency limits the ability of stakeholders to determine whether BII’s investments have positive development results, the extent to which they mobilise private capital, or whether sufficient environmental, social and governance (ESG) monitoring, management, and mitigation are in place. Significantly, BII is less transparent than a number of non-sovereign (private sector focused) multilateral and bilateral development finance institutions (DFIs), including peer institutions in the European Development Finance Institution Association (EDFI) and multilateral institutions that the UK is a significant shareholder in.

Publish What You Fund is the global campaign for aid and development transparency. On January 25th 2023, Publish What You Fund published the DFI Transparency Index, the first ranking of the transparency of the world’s leading DFIs. The Index ranked the transparency of 21 non-sovereign portfolios. BII was ranked 12th out of 21 with a score of 26.5 out of 100. Of bilateral institutions, BII was found to be 5th most transparent out of 12 institutions, ranking below the US International Development Finance Institution (DFC), as well as the French (Proparco), Dutch (FMO) and German (DEG) DFIs. Detailed disaggregated analysis of BII’s performance in the DFI Transparency Index can be found on their dedicated DFI Profile.

The following analysis focusses on key issues that limit BII’s transparency, including the timeliness of investment disclosure, the transparency of development impact and of ESG and accountability to communities data, the transparency of financial information and of financial intermediaries, and the accessibility of data. It concludes with recommendations derived from BII’s DFI Profile from the DFI Transparency Index.


Timeliness of Investment Disclosure.

BII’s transparency is severely constrained by the fact that their disclosure of projects is often out of date. For example, as of February 1st 2023, BII’s data portal only contained three direct investments made in 2021, with a total disclosed value of US $331 million (approximately £267 million). Additionally, the data portal discloses ten investments in private equity funds with a total disclosed value of approximately US $222 million (approximately £179 million). However, BII’s 2021 annual report discloses 49 direct investments totalling £1.47 billion and 26 investments in private equity funds totalling £400.5 million. In short, BII’s data portal contains less than 25% of the volume of investments made in 2021, or 17% of the number of investments made. While these investments are disclosed in the annual report, this reporting is in itself up to 18 months out of date (as the report is published in July 2020), and only contains limited investment information (name, value, and location). There is currently no disclosed investment data for 2022.

BII’s out of date disclosure resulted in penalisation in Publish What You Fund’s DFI Transparency Index. BII was one of only two bilateral DFIs to be penalised in this manner (alongside IFU, the Danish DFI). Best practice includes the early disclosure of investments with significant environmental and social (E&S) risks. Early disclosure involves the disclosure of key details regarding an investment prior to board approval. This practice is commonplace amongst multilateral development banks and has been adopted by the Dutch bilateral DFI FMO. Early disclosure of high risk investments is an integral part of ensuring stakeholders including project-affected people and the civil society organisations that represent them are able to participate in the investment process. BII should adopt an early disclosure policy for, at a minimum, investments with high environmental and social risks.


Development Impact.

It is currently not possible to determine whether BII has a large enough development impact to justify the significant allocations of official development assistance (ODA) that it has received in recent years and is scheduled to receive in the future. This section focuses on three aspects of the transparency of impact reporting from BII; disaggregated results for individual investments, aggregate results at the portfolio level, and impact evaluations. Each of these aspects is an important component in providing evidence of BII’s overall impact. The DFI Transparency Index found BII to be insufficiently transparent in the reporting of disaggregated results. Transparency of aggregate results is better, but disclosure is limited by a lack of impact attribution. Transparency of evaluations is relatively good. 

At the investment level, modest improvements in BII’s disclosure of expected (ex-ante) results are offset by a failure to disclose any actual (ex-post) results. BII adopted a new disclosure format in late 2020 based on an “Impact Dashboard” model. This disclosure improved the transparency of ex-ante impact analysis, although there remains room for improvement by disclosing the indicators and metrics that BII uses to monitor individual investments. BII does not disclose actual results data on a disaggregated basis for its investments. Examples of disclosure of actual results on a disaggregated basis can be found in disclosure by IFU and the International Finance Corporation (IFC) of the World Bank Group.

BII has cited commercial confidentiality concerns as a reason for not disclosing disaggregated impact data. However, Publish What You Fund conducted research with the clients of a leading European bilateral DFI with a similar size and profile as BII, to understand whether commercial confidentiality is a legitimate barrier to improved transparency. The research found that investees would, in many cases, be willing to disclose more information including impact data, if DFIs were to request it. BII should challenge assumptions of commercial confidentiality and seek to maximise impact disclosure in new investments through more expansive disclosure agreements with future investees.

BII discloses aggregate data for its portfolio, including data for key performance indicators such as taxes paid by investees and direct jobs supported by BII investment. However, BII’s annual report makes clear that the data disclosed is not attributable to BII: “The results are largely due to the hard work and successes of the teams at our portfolio companies; our capital and know-how are only two reasons among many for their success. This is why we don’t attribute the increase in job numbers in our portfolio to ourselves.” A failure to use an attribution model for impact data, as is used in carbon accounting practices, carries a number of risks including overstating impacts of investments, double counting impact across multiple investors, and creating perverse investment incentives. BII has recently adopted an attribution model for indirect jobs supported, and should seek to roll this out across all impact data.

BII discloses an evaluation plan that outlines a schedule of future evaluations, in addition to evaluations and case studies. While these provide evidence of impact, the lack of consistent results at the investment level make it difficult to tell how many of BII’s investments are successful in terms of delivering development impact. Given the use of public funds, it is reasonable to expect results reporting on all investments to ensure capital is consistently delivering results. Publish What You Fund recognise that BII invests in risky investment environments and, as such, some investments may not be successful (either in terms of delivering development results or financial returns). However, a lack of success is not a reason for a lack of transparency; it is important that stakeholders are able to see what hasn’t worked as well at what has worked. The currently reliance on case studies of individual investments creates an unbalanced perspective in this respect.


Transparency of ESG and Accountability to Communities.

BII’s transparency concerning its measurement, management, and communication of the ESG risks of its investments is severely lacking. BII does not adequately communicate the nature of E&S risks in its investments and fails to provide assurance that its E&S policies are carried out by its investees.

BII does not disclose the E&S categorisation of its investments. E&S categories are used to provide a broad overview of the E&S risks contained within an investment and typically range from Category A or 1 (high risk) to Category C or 3 (low risk). Of the twelve bilateral DFIs assessed in the DFI Transparency Index, 6 disclosed the E&S categorisation of investments, including Proparco, FMO, DFC, and DEG. BII is the largest bilateral DFI that does not disclose this information. This information is also commonly disclosed by multilateral institutions that the UK is a significant shareholder in, including IFC and the African Development Bank (AfDB). BII also fails to disclose meaningful summaries of the E&S risks of their investments. DFC represents best practice among bilateral DFIs, consistently disclosing a summary of E&S risks of investments, including the disclosure of applicable E&S policies or standards. This information is commonly disclosed by multilateral development banks.

BII does not disclose any E&S documentation that is produced for activities it is invested in. In the case of high and medium risk investments, E&S documents such as environmental and social impact assessments (ESIAs) and stakeholder engagement plans (SEPs) should be disclosed if they have been produced. Disclosure by investors is important in ensuring that project affected communities, and those who represent them, have access to all relevant E&S plans. Again, best practice amongst bilateral DFIs comes from DFC who disclose ESIAs and SEPs for high risk (Category A) investments. These documents are more commonly disclosed by multilateral development banks, including those that the UK is a major shareholder in.

BII and other DFIs commonly state that it is the responsibility of their investees to disclose E&S information to project-affected people. However, it is impossible to judge the extent to which BII’s investees follow the requirements outlined in BII’s E&S policies. The DFI Transparency Index measures whether DFIs provide assurance of community disclosure of the investment, and of the presence of project grievance mechanisms (PGMs) and independent accountability mechanisms (IAM). BII failed all three indicators as no disclosure of this information was identified. BII currently does not have an IAM which is an important element of improving the accountability of DFIs. The creation of an IAM in line with best practices should be a priority. Amongst European DFIs, Proparco, FMO, DEG, and BIO have IAMs.


Transparency of Financial Information Including Mobilisation of Private Finance.

BII does not disclose disaggregated data on the use of concessional finance or on the levels of mobilisation of private finance. Concessional (or subsidised) finance is used by DFIs to de-risk certain investments, making high credit-risk propositions investable. BII has a concessional portfolio called the “Catalyst Portfolio”. This includes investments that are expected to have high development impacts but are not within standard investable credit risks. BII does not include any detail on the nature of the concessionality (subsidy) involved in these investments. As these investments represent a tax-payer funded subsidy for private entities, this information is of public interest. Disclosure of subsidies in the form of technical assistance is conducted by the Belgian bilateral DFI BIO. Additionally, the IFC discloses the level of concessionality in all blended finance investments that it makes.

Mobilisation of private finance is critical to increasing capital flows to emerging and developing economies. BII discloses aggregate mobilisation data according to two methodologies (the MDB methodology and the OECD methodology). However, it does not disclose disaggregated data which would allow stakeholders to ensure that BII is investing in the sectors, industries, and economies where mobilisation is most efficient. IFC has committed to disclose mobilisation data for all future IDA Private Sector Window investments, marking significant progress in this area. As BII has aggregate data on mobilisation, it follows that it must also have disaggregated data which should be disclosed.


Financial Intermediaries.

When disclosed in a timely manner, BII’s transparency of private equity fund on-lending (sub-investments or intermediated investments) is industry leading. While a number of other DFIs disclose the identity of sub-investments, the level of data that BII discloses is the highest.

However, BII’s transparency of on-lending by banks that it is invested in is severely lacking. As such, it is impossible to ascertain what capital invested by BII in commercial banks is used for and whether or not it is financing harmful activities. Publish What You Fund’s DFI Transparency Tool provides guidance on the disclosure of bank on-lending, limiting disclosure requirements to large and high risk on-lending, in line with recognised private sector standards (the Equator Principles). As of 2022, IFC have begun disclosing high-risk on-lending from bank investments.


Accessibility and Standardisation of Data.

Crucially, BII has all of the tools necessary for improved transparency at its disposal. These include the publication of data to the International Aid Transparency Initiative (IATI) data standard, the presence of a bulk download investment file (available in csv and xlsx formats), and a detailed website. However, data deficiencies highlighted above severely curtail BII’s current transparency. It is important that BII improves the timeliness, quality, and quantity of data that it publishes about its investments in the interests of all stakeholders.



Publish What You Fund’s DFI Transparency Index includes a detailed disaggregated analysis of BII’s transparency. The analysis includes the following specific recommendations: