UBS joins the United Nations’ Global Investors for Sustainable Development Alliance, and will focus on delivering concrete long-term finance and investment solutions, including through its USD 5 billion commitment to SDG-related impact investing.
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Review of how the world’s first Development Impact Bond in education surpasses both target outcomes. The Development Impact Bond (DIB) provided operational and financial flexibility for Indian NGO Educate Girls (EG). It achieved 116% of the enrollment target and 160% of the learning target in its final year. The program ran in the Bijoliya, Mandalgarh and Jahajpur blocks in the Indian state of Rajasthan. The social investor UBS Optimus Foundation (UBSOF) provided the upfront working capital of USD 270,000. As a result of the over-achievement, UBSOF recouped its initial funding (USD 270,000) plus a 15% internal rate of return, which equals USD 144,085, from the outcome payer CIFF.q
UBS is uniquely placed as the world’s largest wealth manager to help achieve the SDGs by facilitating multi-stakeholder connections, capital, and cooperation. This 2018 WEF whitepaper outlines the lessons learned, new commitments, and partnership requests.
This case study examines how UBS Optimus Foundation (also known as UBSOF, Optimus, or the Foundation) is investing in new social finance tools such as Development Impact Bonds (DIBs) and impact loans such as Social Success Notes (SSNs) to prototype solutions to scale to improve the lives of children globally. The centerpiece of the social finance portfolio is a pay-for-success model that supports outcomes and results over payment for activities.
The UBS Optimus Foundation applies a systematic four-phase value chain approach to our grantmaking in order to develop, validate, promote and scale up effective solutions to improve children’s health, education and protection.
Launched by BlueOrchard, with support from the Japanese government, the Japan ASEAN Women Empowerment Fund (JAWEF) is a blended fund that provides loans to microfinance institutions serving female entrepreneurs in ASEAN and beyond. Reflecting from the experience of managing JAWEF, several insights for creating or investing in blended funds focused on frontier markets or gender equality can be identified. i.e. Blended finance can be an effective tool for mobilizing institutional capital towards gender-lens investing, and commercially-oriented blended finance vehicles can mobilize institutional investors, particularly when positioned for a specific target market.
This report provides an analysis of the blended finance market, highlights the most active organisations in the space, gives an overview of emerging trends and themes in blended finance, and reflects on progress towards ‘better blending’.
The paper discusses the potential of social finance ecosystems on tackling social issues. It emphasizes the idea that solving social issues is everybody’s business – from governments to businesses – and that those initiatives require sufficient Sharīʿah-compliant funding to achieve sustainability goals. It also discusses the importance of collaboration between the different social oriented organisations can enhance the social impact of the different initiatives. The aim is to ensure adequate financing to all the ecosystem components during the whole lifecycle. This paper adapts the ecosystem concept to the Islamic finance specificities.
In recent years, significant strides have been made towards improving global social outcomes across access to health, education, and better livelihoods. Yet a lot more needs to be done in order to achieve the ambitious SDGs by 2030. This webinar, delivered by KOIS, provided an understanding of innovative finance and the range of tools available to funders; demonstrated, through concrete examples, the potential of innovative finance to create more impact per philanthropic dollar spent; showcased the ability of innovative finance to leverage more capital from private sector for every philanthropic dollar, and discussed how to engage in innovative finance, the pros and cons of different instruments, and addressed potential concerns and challenges.
Impact investors are fueling solutions to the systemic challenges framed by the UN Sustainable Development Goals (SDGs), and they include Asian investments that catalyse solutions to social and environmental issues, finds a new report from Toniic, the global action community for deeper impact investing.
While the market for green bonds has grown globally from $87 billion in 2016 to $167 billion in 2018, Asia has yet to realise its full potential and continues to lag behind the US and Europe in sustainable finance mechanisms.
From traditional philanthropy to venture philanthropy, impact investment and socially responsible investing through ESG integration, social investment is becoming increasingly popular. Read about the growth here.
Rabo Foundation and USAID (India) are supporting local financing for agroforestry, sustainable forest management, and low emission agriculture. Read how they are encouraging financing to businesses in this sector.
Development practitioners are increasingly exploring ways to use blended finance to mobilise more private sector finance, building the momentum driving impact and sustainable investing in Asia. Read about the growth here.
This study presents an evidence-based analysis of the impact investment landscape in India. Based on data gathered over the last decade, it assesses the meaningful contribution that impact investing has made to India’s development journey.
Watch how to design and structure transactions in innovative finance, and learn from illustrations of its applications through case studies in India. This session is led by AVPN member KOIS, and joined by Gautam Chakraborty of USAID.
With women making up nearly a third of borrowers, Investree sees increasing the mix of women entrepreneurs as part of their mission as a company to increase impact – providing solutions for the underserved market.
Green bonds has grown to become popular when it comes to sustainable fixed income investing. But not every company, typically those in the consumer and retail sector, are able to find sufficient projects to issue a green bond. This is where the more flexible structure of the sustainability-linked bond comes into its own. This article talks about the advantages, doubts, and role of sustainability-linked bonds as a complementary financing tool for those companies that are unable to find enough green projects to issue green bonds.
The report discusses the outlook for sustainable and social finance and its opportunities. The growth of private green and social finance is increasingly driven by financial considerations. While it was investors’ environmental and social goals that initially drove global growth in sustainable finance, financial motives are coming to the fore. Green and social finance helps meet the sustainable preferences of stakeholders, hedge and mitigate sustainability risks, and deliver greater resilience. Green and social finance also creates positive recognition among investors, thus broadening the financing base. Moreover, evidence confirms the positive environmental and social impacts of sustainable finance. Social impacts are more varied, but innovative financing instruments such as impact bonds show potential. Governments should then use policies to support the development of social and green finance—financing instruments designed to promote environmental and social goals. The report urges governments to use fiscal measures, legislation, and regulation to accelerate the growth of green and social finance. Regulations that enforce common standards for information disclosure and impact measurement can help ensure that green and social finance is effective, sustainable, and attractive—especially for the private sector.
The three different Newpin SIBs have highlighted some of the key challenges of outcomes-based contracting: measuring impact, sharing risk, having sufficient scale, determining the counterfactual, and dealing with the uncertainty and unknowns of long-term projects.
Blended concessional finance can be used to unlock untapped investment into sustainable development, especially from the private sector. The increasing use of concessional funds blended with DFIs own financing and that of others on commercial terms has brought the DFIs together to 1) develop common standards for implementation of blended concessional finance projects; 2) provide transparent, comprehensive and consistent data on their blended concessional finance activities; and 3) discuss and review the merits and adequacy of existing approaches to blended concessional finance activities. The ultimate objective of this work is to increase development impact, crowd-in private investments while ensuring minimum concessionality, and enhance trust and transparency for the use of blended concessional finance. The development and implementation of a set of Enhanced Principles on the operational use of blended concessional finance in private sector operations has been a key outcome of the initial phases of this work. This report provides an update on the core outcomes of this work conducted in 2020.
Malaysia was the first-ever country in Asia to have a Social Outcome Fund that involves corporations and foundations in its decision-making. The SOF is an ambitious effort to boost Malaysia’s social economy, as businesses go beyond traditional CSR practices.
The 10th edition of the Global Impact Investing Network’s (GIIN) Annual Impact Investor Survey reflects insights respondents who are managing impact investing assets. The report discussed their investment activity for 2019, plans for 2020, their reflections on developments over the past decade, and views of future challenges. It also discusses how COVID-19 might change their future allocations and risk assessments. Some key findings discussed include: the impact investing industry remains diverse, impact investing has growth in depth and sophistifcation over time (i.e. indicators of market growth have changed over the past decade, so have motivations for making impact investments). It discussed how impact measurement and management practices have matured, but opportunities for refinement remain.
The Asian Development Bank (ADB) launched its first theme bond (water) for sustainable development in 2010 in response to growing demand amongst investors to highlight certain key initiatives. Since then, ADB has expanded its theme bond offerings.
Encouraging landscape for innovative cross-sector, evidence-based funding in Asia, or Pay-For-Success (PFS) models. Find out what it takes to overcome market challenges for a PFS model to be successful.
Co-founder & CEO of Unitus Capital explains how India is moving from traditional giving to strategic social investing, why it is picking up, and what are the challenges for philanthropic organizations to move from grant-making to impact investing.
Learn how we can achieve deeper social impact with a Continuum of Capital, where funders may leverage different financial tools – combining grants, debt and equity across multiple investments within their own portfolio.
Blended Finance is the strategic use of development finance and philanthropic funds to mobilise private capital flows to emerging and frontier markets. This report highlights enabling conditions and critical areas for the success of blended finance structures.
Deep dive into one of the Social Impact Bonds (SIB) that Social Innovation and Investment Foundation (SIIF) was involved in, the Health Promotion project in Okayama City, where SIIF provided both technical expertise during the project structuring stage, as well as funding as a risk investor. The project aimed to improve the exercise, nutrition and diets of city residents, encourage their continued participation in society (help give purpose to life), and moderate medical costs. The project cost was ¥370,388,000 to be given over 5 years, from 2018 to 2023.
Published by GIIN and Intellecap, The Landscape for Impact Investing in Southeast Asia is a comprehensive analysis of impact investing activity in the region between 2007 and 2017. The report finds that Southeast Asia’s impact investing ecosystem has developed significantly over the last decade, with USD 904 million deployed to the region by private impact investors (PIIs) and around USD 11.2 billion deployed by Development Finance Institutions (DFIs) since 2007. This provides detailed information about the investing activity and trends in 11 countries: Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The report also outlines challenges and opportunities for impact investors, provides details about gender lens investing activity in the region, and analyzes political and economic factors that may inform investment decisions in each country.
The GIIN and Symbiotics present the first comprehensive analysis of the financial performance of private debt impact investment funds. The report analyzes the aggregate performance of 50 Private Debt Impact Funds (PDIFs) and over 100 Community Development Loan Funds (CDLFs). Return figures for both PDIFs and CDLFs are calculated based on annual financial statements dating back to 2012 (or the earliest available year since), provided by the surveyed funds. The analysis shows that, in general, private debt funds seeking positive impact can offer very stable returns across various private debt risk-return strategies, sectors, impact themes, and geographies.
Interest in sustainable investing is growing rapidly in Japan, yet there are primary barriers to the widespread adoption of sustainable investing in the country. This report details the barriers and recommends practical ways to tackle them.
Globally, a wave of innovation is sweeping across the financial sector, from public equities to bonds, real estate to insurance, venture investing to small-business lending. In each of these areas, innovative players are using an ever-growing range of instruments to achieve social and environmental benefits, while producing attractive returns. This is the exciting field of sustainable finance, and it is growing fast. Promising shoots of innovation have emerged in Asia, but progress is highly uneven, and the vast potential of sustainable finance is still to be fully realized. Take a deep dive into Asia’s four largest economies — China, India, Japan, and Indonesia — to highlight how innovation in sustainable finance is helping mobilize private capital at scale to solve important social and environmental challenges. We will also highlight some opportunity areas, where we see issues not being addressed by sustainable finance or opportunities to bring existing sustainable finance models to greater scale.
This publication is a sequel to the OECD 2015 report on social impact investment (SII), Building the Evidence Base, which sets out a distinct typology and framework for SII to differentiate between that and other conventional investments, particularly in terms of explicit and measurable impact goals. Based on findings from research, surveys, interviews, expert meetings, workshops and regional round tables, this second study brings new evidence on the role of SII in financing sustainable development.
This study aims to establish evidence on the financial performance of private debt impact funds and its underlying drivers, and analyse it through the lens of different investment strategies and sectors. Symbiotics initially launched this research in collaboration with the Global Impact Investing Network (GIIN) to fulfill a market data gap on the return patterns of private debt, the prime asset class in impact investing today in terms of volume.