The project's overall objective is to improve ESG performance in the financial and real sectors through early identification of ESG risks, capacity building to manage these risks, and making full use of ESG related investment opportunities, thereby promoting financing flows in well-governed and sustainable projects in high-risk sectors. Therefore, the project will contribute to de-risking key sectors, improving the sustainability of Nepalese companies, and unlocking/creating new market opportunities for IFC investment while supporting portfolio strength. The project aims to achieve the following objectives: 1. Strengthened ESG regulatory and reporting framework by developing a regulatory framework for green financing, developing an ESG code by working closely with the Securities Board of Nepal (SEBON), Nepal Stock Exchange (NEPSE), and Nepal Rastra Bank (NRB) and building the capacity of the regulator for implementing monitoring and enforcement. 2. Improved capacity of local market intermediaries to provide fee-based training/consulting services on ESG issues/standards/best practices, including gender and climate. 3. Improve ESG standards and practices among FIs, including integrating ESG into their credit policies/procedures and improvements to the ESMS, including climate risk assessment, and improving their on lending and investment capacity to high-risk sectors to facilitate capital allocation to companies with strong governance & sustainability performance. 4. Improve ESG performance among real sector clients (in IFC's priority sectors & high-risk sectors) to address significant investment bottlenecks and improve portfolio companies' ESG performance.