Which of the following best describes the role of IFC in promoting sustainable business practices?

The role of the International Finance Corporation (IFC) in promoting sustainable business practices is accurately described by the choice that emphasizes its function of providing guidance on environmental and social risks. The IFC serves as a crucial institution that aims to encourage private sector investment in developing nations while ensuring that these investments are conducted in a way that is environmentally sustainable and socially responsible. By offering expertise and best practices, the IFC helps businesses understand the potential risks associated with environmental and social factors, enabling them to make informed decisions that contribute to long-term sustainability.

This guidance is essential as it allows businesses to align their operations with international standards and frameworks, fostering an approach that minimizes negative impacts on communities and the environment. The emphasis on advisory roles underscores the IFC’s commitment to building the capacity of businesses to manage risks effectively rather than imposing regulations or mandates, which is characteristic of a different regulatory function. Thus, the correct option highlights the IFC's supportive and educational role in shaping sustainable business practices through risk management guidance.