The Global Steering Group for Impact Investment (GSG) has teamed up with the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) on a new digital policy resource which encourages greater adoption of impact investing in Asia and the Pacific. The research outlines how governments can fuel an impact-led recovery from the COVID-19 crisis to create fairer and more sustainable economic systems.
The digital policy resource entitled “Towards an Enabling Policy Environment for Impact Investment in Asia and the Pacific” provides practical information for policymakers and other stakeholders. The analysis and recommendations draw on international best practice and examples of impact investment policies already in use across the region, including impact-led business incubators and green finance initiatives, to demonstrate how governments in Asia and the Pacific, and around the world, can stimulate impact investment.
The Asia and Pacific region requires additional annual investment of $1.5 trillion to achieve the Sustainable Development Goals (SDGs) by 2030, a figure equivalent to about 5% of their combined GDP. The private sector, which manages $51 trillion in assets across the region, is stepping in to help bridge this funding gap. This study helps policymakers create structures that enable investors to unlock capital for impact investment and maximise its potential.
“COVID-19 has underlined the importance of action-driven policies that focus on social and environmental impacts. We have an opportunity to rebuild economies that are more equal and resilient to future shocks and impact investing should be one of their foundations,” said Cliff Prior, GSG’s CEO. “It is clear that we need more, smarter and outcomes-focused capital to solve some of the most challenging societal issues we face.”
The GSG and ESCAP policy guidebook analyses impact-focused programmes currently being developed in the Asia-Pacific region and identifies how governments can address the need for impact investment as market facilitators, participants or regulators. In these roles, governments can strengthen the demand for impact investment, increase the supply of capital and support market operators.
Solutions to facilitate impact investment include:
- Development of dedicated units within national governments, such as the National Advisory Board for Impact Investment in Bangladesh, established in 2018, to set the strategic direction for developing the impact investment ecosystem in the country.
- Creation of impact-led business incubators and accelerators, following the example of the Singapore Centre for Social Enterprise (raiSE), which contributed to a 32% increase in the number of social enterprises established in the first two years following its creation in 2015.
The study also shows how governments can foster a just recovery through impact-driven funds and programmes, including Indonesia’s Green Bond initiative, which supports projects that help mitigate climate change and protect biodiversity. The research outlines how national authorities can develop regulation that embeds impact considerations in investment decisions, such as Cambodia’s Sustainable Finance Initiative, which sets finance safeguards and risk management standards for social and environmental impacts created by the private sector.
“More than ever, we need to showcase best practices and concrete actions that governments can take to utilise the potential of new investment - investment that can drive the Asia-Pacific’s economic recovery towards social and environment sustainability, boosting the entire impact investment ecosystem towards Sustainable Development Goals” noted Mia Mikic, Director of Trade, Investment and Innovation Division, ESCAP.
Notes to editors
The Global Steering Group for Impact Investment (GSG – www.gsgii.org) is an independent global steering group promoting sustainable development and advancing education in impact investment. The GSG was established in 2015 as the successor to, and incorporating the work of, the Social Impact Investment Taskforce established under the UK’s presidency of the G8.
The GSG’s National and Regional Advisory Boards (NABs & RABs) currently cover 33 countries. It has established strategic partnerships with leading global organisations such as UNDP and the Impact Management Project. It is an organisation of over 500 senior people, chaired by Sir Ronald Cohen, which brings together leaders from the worlds of finance, business, government, social organisations, and philanthropy.
The GSG, a British charity, aims to bring solutions to social and environmental challenges by spreading the use of impact approaches in making philanthropic, business and investment decisions.
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) serves as the United Nations regional hub promoting cooperation among member States in the Asia-Pacific region towards inclusive and sustainable development.
The largest regional intergovernmental platform with 53 Member States and 9 Associate Members, ESCAP is a strong regional think-tank offering countries sound analytical products and insight into the evolving economic, social and environmental dynamics of the region.
The Commission’s strategic focus is to deliver on the 2030 Agenda for Sustainable Development, which it does by reinforcing and deepening regional cooperation and integration to advance connectivity, financial cooperation and market integration.
Research and analysis coupled with ESCAP policy advisory services, capacity-building and technical assistance to governments support the sustainable and inclusive development ambitions of its members.