Beats | September 26, 2018

Blending finance and measuring impact for the UN Global Goals

Dennis Price
ImpactAlpha Editor

Dennis Price

The 73rd U.N. General Assembly and dozens of side events are generating a slew of announcements and reports. A few worth noting:

An emerging impact measurement architecture… The Impact Management Project has driven consensus about what it means to deliver impact through investing. A new network of standard-setting organizations could help standardize such impact management. The new IMP Network aims to move impact investors and businesses beyond risk management and good intentions to measurable improvement. The Sustainable Development Goals challenge enterprises and investors to account for both positive and negative impacts, the network says, “and to improve those impacts over time.”

  • All together now. The network will be housed at Bridges Fund Management and led by Clara Barby. Members include UNDP, OECD and IFC, as well as Social Value International, Global Reporting Initiative, Principles for Responsible Investment, Global Impact Investing Network, World Benchmarking Alliance and the Global Steering Group for Impact Investment.
  • Impact, generally accepted. “In financial management, ‘general acceptance’ of norms for how we talk about, measure and manage financial performance enables capital to flow efficiently across value chains and across borders,” said Barby in statement. “If we want impact management to become the norm for every enterprise and investor, as the UN Sustainable Development Goals demand, we need shared principles, reporting standards and benchmarking methods for impact.”

…can help validate investments in the SDGs. Investor demand for SDG-aligned investments has been stalled by confusion about what is and isn’t an investment in the Global Goals. Principles and certifications under the banner SDG Impact are aimed at bringing standardization and clarity to SDG investing. First, the United Nations Development Programme will work with other members of the IMP Network to develop a set of “SDG impact standards.” UNDP will then manage a new seal and certification for investors and enterprises to authenticate their alignment with the SDG Impact standards. The UNDP “intends to help authenticate the contribution of SDG-aligned investment capital in the market today, and play a role towards increasing the total volume of SDG-enabling investment by encouraging participation from new actors,” said the UNDP’s Achim Steiner at a UNGA High-Level Event. “If we are successful, we can help meet a significant portion of the SDG funding gap.”

Blended finance are deals way up. Blended-finance deals for sustainable development are coming hot and heavy. The tally of $100 billion in deals in the “State of Blended Finance” report already is out of date. The up-to-date number from the website of blended finance platform Convergence: $131 billion. Capital committed to blended-finance deals leveraging public and philanthropic funds to attract private capital to sustainable development more than doubled from last year’s total of $51.2 billion.

  • Follow the leaders. USAID (47), IFC (144), Omidyar Network (19), Gates Foundation (19), Calvert Impact Capital (20) and Deutsche Bank (12) are leaders in the total number of commitments to blended finance deals.