Impact Investment needs global standards and better measurement

Investment 2019.jpeg

(Unsplash, 2019)

This article is brought to you in association with OECD.


Social impact investment, which aims to improve well-being as well as earn a financial return, could be more effective if it were more clearly defined internationally with more measurable outcomes, according to a new OECD report.

Social Impact Investment: The Impact Imperative for Sustainable Development calls for international standards to be applied on collecting data and measuring impact. Currently, most impact investment goes to areas with relatively easy returns, such as financial services, energy and housing as perceptions persist of a trade-off between social and financial returns.

The OECD has proposed defining social impact investing as targeting core development, social and environmental areas that help people and countries most in need in underserved or developing regions, and stipulating that the primary focus should be on delivering measurable impact. No such definition is being universally applied, however, and there is little rigour in setting boundaries on what should count as impact investment and a lack of internationally comparable data and evaluation tools.

“The challenge lies in defining and measuring impact,” said OECD Development Co-operation Director Jorge Moreira da Silva. “Different countries, public and private organisations are using different yardsticks to measure different elements. To counter the risk of ‘impact washing’, public authorities have a responsibility to set standards and ensure they are adhered to.”

The number of social impact investment funds has quadrupled in two decades to over 200 funds with USD 228 billion invested, more than half of that in emerging markets, according to the Global Impact Investing Network. The phenomenon is spreading to mainstream investment funds as wealthy investors and philanthropists increasingly want their money to also have a positive social or environmental impact.

Impact investing is proving to be key for channelling new resources – primarily funding but also innovation, accountability and sustainability – towards the UN Sustainable Development Goals. For example, a GBP 10 million bond that funded a UK non-profit, Golden Lanes Housing, that has provided adapted housing and related services for around 1,500 people with learning disabilities was also able to return 4% interest to investors. In the developing world, investment firm Sarona Asset Management provides growth capital to small businesses in developing countries and frontier markets including Egypt, India, Nigeria and Tunisia.

The OECD report says 45 countries have adopted public instruments related to impact investing, with the European Union, United Kingdom, Malaysia and France leading the way, and 20 have adopted a legal definition for social enterprises.

It says governments should now do more to improve fiscal and regulatory incentives for impact investing and put in place the necessary legal structures for the market to function well. This could include updating financial and fiscal regulation, establishing reporting standards, and increasing flexibility into corporate legislation so that rather than having to identify as being a for-profit or a non-profit, companies can be hybrids.

Improved standards for social impact investment funds should lead to more effective impact investment by mainstream funds.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

We finally have a life-saving vaccine for Ebola

Refugee crisis update: Commission is struggling alone with little help from EU or G7 leaders

Senior UN officials call for return to sea rescues, after ‘the worst Mediterranean tragedy of this year’

Under fire, UN refugee agency evacuates 135 detained in Libya to Niger

Further reforms in Sweden can drive growth, competitiveness and social cohesion

Eight years in, Syria still embroiled in conflict ‘that no longer sparks outrage’, Security Council hears

Sudan: top UN official demands cessation of violence and rape against civilians by security forces

Is co-living an answer to the affordable housing crisis?

This is why people live, work and stay in a growing city

4 big trends for the sharing economy in 2019

Blockchain can change the face of renewable energy in Africa. Here’s how

Eurostat confirms a dangerously fast falling inflation in Eurozone

5G will drive Industry 4.0 in the Middle East and Africa

What meat consumption has brought to the environment and how herbal diets can help human health

How much time has the ‘European Union of last chance’ left?

Weak growth of G20 international merchandise trade in third quarter of 2018

In Washington D.C., Guterres signs pact with World Bank, meets US President Trump

These are the 3 key skill sets workers will need to learn by 2030

China greenlights first underwater high-speed railway

More capital and liquidity for the banks

ECB readies itself for extraordinary monetary measures defying Germany

On the Global Day of Parents, UNICEF is urging support for parents to give children ‘the best start in life’

Ride-hailing apps are making the developing world’s traffic problems worse

A free press is ‘cornerstone’ for accountability and ‘speaking truth to power’: Guterres

Miguel Arias Cañete European Commission

EU should invest more in climate and not sit back on its laurels and watch

Scientists have created biodegradable microneedles to fight eye disease

How migrants who send money home have become a global economic force

This is what Belgium’s traffic-choked capital is doing about emissions

Investing in working conditions and quality jobs

Commission presents its response to Antisemitism and a survey showing Antisemitism is on the rise in the EU

The importance of exchanges for the medical students of the world

Here’s how we reboot digital trade for the 21st century

COP21 Breaking News: Paris Pact on Water and Climate Change Adaptation Announced

‘Break the cycle’ of disaster-response-recovery, urges top UN official, as death toll mounts from Cyclone Idai

Combatting terrorism: EP special committee calls for closer EU cooperation

Youth Parliament to finalise millennials´ priorities for future of the EU

Mosul’s ‘3D contamination’ adds to challenges of deadly mine clearance work

The 13th round of TTIP negotiations hits a wall of intense protests and growing concerns

This AI outperformed 20 corporate lawyers at legal work

Big world banks to pay $ 4.95bn for cheating customers; Is it a punishment or a gentle caress?

Why private investment in deforestation-free commodity production needs to be scaled up

INTERVIEW: ‘Defend the people, not the States’, says outgoing UN human rights chief

Except Poland, can climate change also wait until 2021 for the EU Market Stability Reserve to be launched?

How to help companies become global defenders of LGBTI rights

These refugee children have danced in the snow for the first time

GSMA announces new keynote speakers for 2018 Mobile World Congress

New book honours UN women who made HERstory

The European giant tourism sector in constant growth

Congolese expelled from Angola returning to ‘desperate situation’: UN refugee agency

Women ‘vital’ to peace efforts and ensuring long-lasting stability in Afghanistan

This is what a smart city should do for its people

EU members commit to build an integrated gas market and finally cut dependency on Russia

Is Eurozone heading for disinflation?

‘Maintain calm’ and ‘exercise patience’ UN envoy urges, as Nigeria heads to polls

EU to scrutinise foreign direct investment more closely

American women are 50% more likely to die in childbirth than their mothers

Myanmar military target civilians in deadly helicopter attack, UN rights office issues war crimes warning

Eurozone’s north-south growth gap to become structural

MEP Cristiana Muscardini @ European Business Summit 2014: International Trade in Europe

“As German Chancellor I want to be able to cope with the merger of the real and digital economy”, Angela Merkel from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s