This report, Social Impact Investment 2019: The impact imperative for sustainable development, depicts the state-of-play of social impact investment approaches globally and compares regional trends and assesses prospects for future growth with a special focus on data issues and recent policy developments. It provides new guidance for policy-markers and development finance providers to maximise the contribution of impact investing to the 2030 Agenda, the Paris Agreement and the Ababa Action Agenda.
In 2015, the OECD established a distinct typology and framework to differentiate between SII and conventional investments. It called on social impact investors to define explicit and measurable impact goals, committing to their evaluation and compulsory reporting. Evidence presented in this report shows that, today, most investors seek market rate returns, and the assessment of achieved social outcomes is uneven at best. To counter the danger of “impact washing”, public authorities have the ultimate responsibility – in their capacity as market regulators, policy-makers and development finance providers – to establish and promote integrity standards.
A key priority for the OECD Development Assistance Committee (DAC) remains to shift away from private and blended finance checking the “sustainable development box”, by funding the easiest projects in higher income countries, to reaching the more challenging contexts and sectors where it is needed most. Balancing this with private investors’ inherent requirement to demonstrate profit is at the core of this.
- ensuring financing is going where it is needed most;
- applying innovative approaches to reaching the SDGs;
- addressing data and measurement challenges;
- evaluating the social, environmental and economic results of public initiatives.
These four pillars and ensuing policy recommendations are intended to ensure that financing for sustainable development achieves real impact as a result of collective effort.