AFI participates at practice exchange of the Initiative Impact Measurement and Impact Management

mmateen
27. April 2021
General

What contribution can impact investing make to great transformation? – For a livable future, we need profound change processes on an ecological, social and societal level, for which impact investing is an important driver through impact-oriented investing. SDGs

Many thanks to the 30 participants in yesterday’s practice exchange of the impact measurement and impact management initiative of the Federal Impact Investing Initiative. Special thanks for their contributions go to Magnus Göpel & Safar Sarif (Impactive Values) on the role of SMEs in the transformation process, Sophie Kazmierczak (NEXT Generation Invest GmbH) on the importance of real estate properties with clear social added value, and Zoé Constantin CFA (IMPACT Partners) on the opportunities of impact private equity and social impact measurement.

We will of course continue the active exchange, among others on the following questions: How can lighthouse projects help to promote impact orientation also in the mainstream? Do impact investors also need their own Theory of Change? How can positive change through investor impact and company impact succeed in different asset classes?

If you are interested in exchange/cooperation, please contact us! Juliane Boeselager & Manuela Fritzsch

Tags: bigtransformation, impactinvesting, impactoriented, sdgs

The 2030 Agenda for Sustainable Development and the Paris Agreement (both adopted in 2015) as well as the European Green Deal call for a deep transformation towards an inclusive, socially just, carbon-neutral and regenerative economy.

The UN estimates that annually $2.5 trillion need to be mobilised to finance the Sustainable Development Goals (SDGs). And yet, the COVID-19 pandemic creates a massive setback in the realization of the 2030 Agenda for Sustainable Development. Amidst the health, economic and social impacts of the pandemic, financing micro, small and medium enterprises (MSME) remains an important vehicle to stimulate growth and socio-economic development. Among other effects, the COVID-19 crisis has caused a slowdown in microfinance activities and thereby threatens the financial inclusion of low-income populations. In this context, Impact Investing can significantly contribute to the solution of societal issues. In response to the effects of pandemic, at Agents for Impact we focus on exploring new opportunities and identifying strategic partners around the globe to support local entrepreneurship, encourage women empowerment and contribute to sustainable development.

The 2020 Annual Impact Investor Survey of the Global Impact Investing Network (GIIN) estimates the impact investing market to cover USD 715 billion. In fact, globally more and more investors are shifting their capital into impact investing, i.e. investments pursuing not only a financial return, but also a positive environmental and/or social impact. Evidence-based impact measurement is not only of the core characteristics of impact investing, but also serves as a starting point for impact management. Yet, due to its multidimensionality and complexity impact measurement poses a challenge to investors and investees.

As impact investors have to demonstrate the social and/or environmental impact of their investments (especially financial institutions subject to the EU Sustainable Finance Disclosure Regulation, SFDR), they also need an enhanced sustainability measurement, which is clear, reliable, quantifiable & comparable. Consequently, the financial sector is increasingly seeking data and evidence from their investees. In order to source funding from international impact-oriented investors, investees (such as microfinance institutions/MFIs) are well advised to provide evidence regarding their sustainability performance. Besides a roadmap towards a more prosperous and sustainable world by 2030, the SDGs are also offering a positive, common language advocating for social and environmental issues. This is where impact measurement comes into play to assess the status quo and pave the way to create even more positive impact.

As mentioned above, further capital needs to be mobilised to address the prevalent global challenges (such as climate change, persisting inequalities and a sustainable COVID-19 recovery) and finance the SDGs. In order to further strengthen the German Impact Investing ecosystem, we joined the Federal (German) Initiative Impact Investing (https://bundesinitiative-impact-investing.de/) as member and are co-leading its initiative “Impact Measurement & Management” (together with PHINEO) as a platform for impact practitioners to facilitate discussions about impact measurement approaches as enabler towards an impact-oriented economy and exchange of best practices.

Close Panel

You Might Also Like

AFI reached 1000 followers on LinkedIn

AFI supports student competition on the development of the Ukrainian

Update on India