- Most countries in the Asia-Pacific are not on track to achieve the UN’s sustainable development goals (SDGs) by 2030.
- Substantial funding gaps exist across multiple SDGs, particularly for the SDGs on food security, health, energy, water & sanitation and climate action.
- A multitude of actors like philanthropic foundations, corporations, financial institutions, impact funds, intermediaries and impact organisations such as non-profits and social enterprises can help bridge this investment gap.
- Social investment, defined as capital that aims to create or amplify social impact alongside potential financial returns, can be utilised to achieve the common goal of contributing to sustainable development.
The principles are based on an extensive literature review and in-depth interviews with a range of experts from philanthropies, foundations, private companies & investors, multilateral networks and academia.
The principles are mapped across the following five stages of a project life-cycle: pre-investment, investment planning, implementation, completion and post-completion. At the pre-investment stage, the research recommends social investors to: (1) collaborate with intermediaries and partners to design an ecosystem that drives change, (2) not reinvent the wheel and utilise existing research to make the leap of faith that is necessary for social investment decision but invest in research in areas where appropriate research or experience is lacking.
At the investment stage, investors can prioritise investments that deliver multiple impacts while also providing knowledge and capacity building to ensure that best team is in place for smooth implementation. Investors need to be mindful of impact goals during project planning and should map these backwards to identify necessary preconditions and intermediate outcomes of the project. The research also finds that projects that simultaneously provide access and information as well as address behaviour issues are more likely to translate into genuine benefits. At the implementation stage, engaging a local partner can be a meaningful step. Localisation helps ensure that the local context is compatible with factors essential to project success.
At the completion stage, the research recommends trusting the grantee with project implementation and providing them flexibility. Reviews and evaluations must aim to identify the best practices and things to be improved upon. Investors should measure impact and take responsibility for it, but should not be driven entirely by meeting arbitrary quantitative standards. It’s important to decouple impact from quantifiable outputs as qualitative impact, though not easily measurable, is equally important. At the post-completion stage, investors should ensure responsible closure. For handovers, ascertain continuity of resources, networks and knowledge to make the transition smooth during project closure.
Pooja Chaudhary, Senior Manager, Policy and Insights, Asia-Pacific at Economist Impact and editor of the report, says: “Social investment in Asia is not a new concept, but given the increasing funding gaps to achieve the 2030 SDG agenda, it’s more critical than ever to channelise social capital and integrate best practices in social investment decisions to achieve optimal outcomes.”
Visit impact.economist.com/sustainability/project/advancing-impact-in-asia/ for the full report.
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