ImpactAlpha, Dec. 13 – Mandatory impact accounting. Harmonized sustainability standards. And broadened powers for multilateral development banks and development finance institutions to absorb more risk and mobilize private investment.
These are some of the recommendations of the Impact Task Force, a four-month effort convened by the G7 and Global Steering Group for Impact Investment to explore ways to accelerate a green and just transition. The work centered on two tracks: improving impact data and expanding financial structures that can mobilize investment.
The 120-member group included well-known names such as U.N. special envoy Hiro Mizuno, Courageous Capital’s Laurie Spengler, LeapFrog’s Andrew Kuper, BlackRock’s Sandra Boss, and Generation’s David Blood and Clara Barby. Just eight years away from the 2030 deadline for achieving the Sustainable Development Goals, “the mobilization of private investment and innovation for public good is mission critical,” says task force chair Nick Hurd.
The task force report, entitled Time to Deliver, identifies collaborative investment models that can be replicated to mobilize capital, such as include the Global Energy Alliance for People and Planet, a $1 billion initiative by the IKEA Foundation and Rockefeller Foundation to catalyze investments in distributed renewable energy. The Universal Energy Facility, a multi-donor, results-based financing facility, is scaling energy access in Africa. And the Natural Capital Investment Alliance and the LEAF Coalition are promoting natural capital solutions.
Blended finance is highly effective, the task force notes. Particularly promising is the increased use of guarantees and insurance coverage at a portfolio and vehicle level.
Another call to action: increasing the integrity and transparency of impact measurement and reporting standards, building off of the new International Sustainability Standards Board initiative. “Impact transparency is a powerful lever for change,” reads the report. “Investment decisions are being taken today with incomplete information.”
The Impact Task Force’s recommendation’s land in the wake of an expose by Bloomberg Businessweek that called into question the environmental, social & governance ratings of MSCI, a major provider of company ratings and indexes underlying “sustainable” funds.