The Global Resilience Consortium is an avid supporter of the concepts established through the Building Bridges initiative as an open and collaborative effort to accelerate the transition to a sustainable financial system. Building Bridges brings diverse actors from the finance industry, the United Nations, international organizations, NGOs, academia, and government together in collaboration around a common vision of advancing sustainable finance to address the Sustainable Development Goals (SDGs).
GLOBAL RESILIENCE FINANCE
Creating actionable knowledge in Global Resilience Finance requires educating and connecting the sustainable development-minded community to finance specialists in various sectors to support a sustainability revolution. A collaborative open innovation mindset is needed to create new economic systems of sustainable finance for grassroots impact investment. Investors will only understand measurable outcomes regarding the impact spelled out in securitized loans or investment products. Blended finance will likely bring together public funds and private equity in a pipeline approach. For most investors, the risk and reward for social value investing must equal any commercial investment alternative.
The Global Impact Investing Network has developed a category of finance that combines social improvement and profitability. Quantifiable results are essential to measuring impact investing, whose characteristics are:
• An intention to have a positive social or environmental impact
• An expectation of generating a financial return
• A range of return asset classes targeted
• A commitment to report social-environmental investment performance
In support, the Global Resilience Consortium’s objective is new ecosystems of sustainable finance for global resilience and youth empowerment projects for sustainable development, implemented through a voluntary global network of regional resilience readiness centers. Its goal is to help overcome the information gap to identify opportunities. It helps to overcome the narrative gap between private structured finance and public investment. It promotes integrated national strategies and financial frameworks that link to accountability and measurement of success or failure.
This emergent area of finance differs from country to country, depending on the state of supportive regulatory incentives. Current concepts of social value investing need to include going from shareholders to stakeholders in which private sector investors seek at least comparable returns in community-led impact finance ventures, as they do in commercial investment opportunities. Involved are “social impact bonds” as unique forms of securitized assets, which come with special tax incentives (or excessive tax liabilities in areas of under incentivized legislation). Much work still needs to be done in this arena.
Standards for measuring progress within each of the 17 United Nations Sustainable Development Goals (SDGS) at the local level can help make the impact finance approach more intelligible to investors once the risk and reward factor is equal to other alternative investment approaches. Cross-sector partnerships can help build an investor pipeline once they are convinced they can make money.
Open innovation approaches are required to close the financial gap to achieve the UN SDGs locally. The sharing of best practices can help accelerate the strategy and unleash much more significant sustainable funding sources through blended finance systems. Philanthropy can multiply its overall impact in blended, cross-sector finance by helping to underwrite some of the risks of loss for innovative and experimental projects.