Press release 14th Jul 2022

New research explores benefits and challenges of integrating high anti-corruption standards in investments

July 14, 2022 - Most impact investors operating in high corruption risk markets are not making the most of their position to proactively promote business integrity standards, according to new research by Transparency International UK.

Investing with Integrity finds that too many investors in this fast-growing sector – that manages between $500 billion and $2 trillion globally – view corruption purely from a compliance perspective.

Read the report

These firms tend to limit business integrity considerations to due diligence before they invest, and only revisit anti-corruption when concerns arise. But this reactive approach risks undermining the full potential of impact investors in international efforts to meet the UN Sustainable Development Goals.

Investing with Integrity is the first comprehensive guide for investors seeking to embed the anti-corruption element of business integrity in their work. It details how this approach can benefit investors by both improving development impact and helping avoid potential negative reputational, financial, legal and regulatory consequences.

Based on more than 50 interviews with professionals in developed and developing markets, asset owners and investees, the report explores the realities of implementing business integrity principles in impact investing, illustrates challenges that may arise and provides guidance on how to best respond.


Ingrida Kerusauskaite-Palmer, Head of Business Integrity at Transparency International UK, said:

“As some of the first movers in emerging and frontier markets, impact investors are in a unique position to set the standards which others follow, but despite pockets of good practice, our research shows not enough are promoting high standards of business integrity. Backing projects that benefit communities and the environment are vital to sustainable development, but unless corruption is addressed in tandem, the potential of an investment can be dramatically undercut. With the right resourcing, impact investors operating in high corruption risk jurisdictions can become leaders in business integrity by supporting investees to strengthen their approach to risk management in this area.”


A roadmap for impact investors to take advantage of their position to encourage high standards is one of five key recommendations highlighted by the report. Others include:


  • Viewing business integrity as a central tenet of their development mandate – not just a compliance issue

Many of the countries where impact investors look to deploy capital are entrapped in vicious cycles of corruption with harmful developmental consequences. This corruption deepens poverty and exacerbates inequalities, with its burden falling hardest on women, vulnerable groups and the environment.

Despite this, corruption as an issue is largely absent from leading ESG frameworks used by impact investors. This report highlights how business integrity fundamentally shapes the development outcomes from investments by demonstrating how, for each investment, high standards of business integrity underpin financial sustainability, strengthen ESG risk management and prevent unintended harms.


  • Improving coordination of business integrity and ESG to strengthen risk management and provide a platform for realising development impact

Across the lifecycle of an investment, business integrity and ESG intersect in important ways, but approaching them as separate issues can limit development impact.

Approaching these functions as complementary can help form a more holistic understanding of an issue, its drivers, and the options available for mitigation. This report demonstrates how these benefits can be achieved with analysis around the topics of gender and healthcare standards.



Notes to editors:

Investing with Integrity can be downloaded here.

This report is aimed at impact investors (investment professionals, compliance and business integrity teams and ESG and impact specialists,) but also relevant for investors in asset management firms, businesses that receive capital from investors, and the home governments and regulators of impact investors.

‘Business integrity’ sits at the intersection of financial crime compliance and ESG. For this report, we focus on the corruption element of business integrity and argue that corruption, given its directly harmful societal consequences and ability to undermine other forms of impact, is a distinct issue needing specific attention.

We follow the Global Impact Investing Network (GIIN) definition of impact investments as “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return”.

This project was funded and developed alongside British International Investment (formerly CDC Group), the UK's development finance institution.