Stockholm (NordSIP) – As impact investors from around the globe converged on Amsterdam this week for the 2024 edition of the Global Impact Investing Network’s(GIIN) Forum, its annual conference, a number of topics stood out from attendees’ priorities.
As the postcards from the event show, blended finance, channelling funds to emerging markets, biodiversity and carbon credits were recurrently mentioned by the conference’s participants.
Emerging Market Shyness and Blended Finance
On Wednesday morning, after GIIN CEO Amit Bouri took the stage to announce that impact investments have surpassed US$1.5 trillion, journalists were able to sit with Amit Bouri and Dean Hand to discuss the details of this year’s report on the size of impact investments. Beyond the headline growth figures, one of the facts that most stood out was the relatively small share of impact investment flows that were channelled to emerging market, where funding would intuitively be most impactful.
The session that followed the GIIN’s announcement discussed how pensions are embedding impact into their strategies, aligning investments with beneficiaries’ values and driving real world, positive outcomes. The panel was composed of Alfred Slager, Non-Executive Board Member ABP Pension Fund; Anders Stensbøl, Chief Investment Officer at Denmark’s Velliv Pension & Livsforsikring and Amy O’Brien EVP, Global Head of Responsible Investing Nuveen, a TIAA Company and was moderated by Sarah Murray, who is a contributor to the Financial Times.
The panel discussed how they integrated impact, the goals that their organisations committed to and how their internal frameworks shaped their impact investments. However, as the session drew to an end, and participants were asked to describe what they throught the field needed, Velliv’s Stensbøl remarked that impact investments needed to cooperate with development finance institutions (DFIs) and lean more onto blended finance to create opportunities that attract investors that are more exposed to short-term quarterly performance concerns and who cannot sacrifice returns in the short-term or take on too much credit risk.
Velliv’s participation in the Word Bank’s Reforestation-linked bond is an example of type of structured investments that Stensbøl believes would be able to create a more welcoming environment for more short-term risk averse investors. Stephanie Bilo, Chief Client & Investment Solutions Officer at responsibility, was another attendee of the GIIN Forum that mentioned blended finance to us directly, noting that “I was particularly encouraged by the panel with Velliv which stressed the importance of partnerships to learn and scale up impact investments globally. Partnerships are particularly relevant in the field of blended finance, as a crucial way to expanding climate finance in emerging markets (EM). Given the still-small share of EM impact funds highlighted in the GIIN report, there is much-untapped potential.”
Later, as the conference drew to an end, the GIIN hosted a “Blended Finance Gallery Exhibition”, where those interested were able to meet financial experts involved in the deals and discuss blended finance deals in more detail.
Biodiversity, Natural Capital, Forests and Carbon Credits
Biodiversity was the topic that perhaps was most often mentioned as the future of where impact investing needs to move towards. When Velliv’s Stensbøl referred to blended finance, it was in the context of finding a channel for biodiversity investments. In his postcard, Stensbøl alludes to concepts of double materiality, noting the importance not just of human activity for biodiversity and nature conservation, but how a lot of economic activity is dependent on natural resources to generate their end products, implying biodiversity is crucial to healthy economic activity, long-term profits and successful financial performance.
The topic of biodiversity and natural capital took centre stage again during the conference. First Charlotte Kaiser, Head of Impact Finance BTG Pactual Timberland Investment Group, hosted a session highlighting concrete examples of collaboration based on recent announcements by Microsoft, Meta and others. Then
Later, closer to the end of the conference, on Thursday afternoon, a panel was gathered to discuss sustainable forestry, biodiversity and carbon credits. The session was led by Shauna Matkovich, Founding Director The ForestLink and host of the Forest Invest podcast, and included Anne Valto, Senior Development Impact Adviser at Finnfund, MaryKate Bullen, Managing Director at Forest Investment Associates and Veronica Ayzaguer Fund and Impact Manager at Agroempresa Forestal (AF). The participants explored the wide range of certifications and acronym that populate this sector and engaged the audience with an interactive exercise to help investors identify opportunities to maximize financial returns and impact in their portfolios. Inevitably, the topic of carbon credits and their certification came up. The panel noted that the recent controversies were unfortunate but that it seems as though third party certifiers have reacted constructively to these issues and have endeavoured to improve their frameworks. “These are growing pains,” one of the panellists noted.
Later, when speaking with Finnfund’s Valto, she echoed the concerns expressed by responsibility’s Bilo regarding the ability of investors to find profitable models for biodiversity. “This has generated many conversations about carbon credits, their ethics, controversies and their ability to generate cash flows in the lead-up to the culmination of forestry projects. There are ways to invest profitably in biodiversity but this is still a growing field.”
Using AI to Make an Impact
Last but not least, at a time when AI has been dominant, Miguel Luengo-Oroz,
Founder and CEO of SpotLab.ai, took the stage to present case studies of how AI could be used to advance impact goals. Instead of discussing ways in which AI could be used to facilitate investments, Luengo-Oroz presented two case-studies where the application of AI to real problems made a concrete impact on people’s quality of life.
The first case Luengo-Oroz discussed was the medical application of an AI technology to discover data patterns through mobile devices at point-of-care for the diagnosis of Neglected Tropical Diseases. Funded by the Bill & Melinda Gates Foundation, this technologies allows AI models to be integrated into mobile devices, which can then be superimposed onto microscopes to test samples and diagnose diseases at the patient’s location.
The second case study focused on a water delivery system project in a refugee camp in Jordan during the Syrian war, which used drones and satellite images for camp monitoring purposes to forecast needs and aid in-camp infrastructure planning.
Celebrate but Check
While newcomers were welcomed and the growth of impact investors was celebrated, enthusiasm at this development was tempered by caution. As a niche movement started by investors deeply committed to change the world for the better, impact investing is not a field that lends itself to be easily permeated by opportunists, lest impact washing become as big a problem as green washing.
“We cannot solve the world’s challenges if impact investing remains niche. But we need to be mindful of our duty to ensure that we are still allocating capital for impact. [Impact investing isn’t] easy, but impact investing is not about doing the easy thing.” Hadewych Kuiper, Managing Director and Member of the Management Board at Triodos Investment Management, concludes.
Next year’s GIIN Forum will be held in Berlin between October 7th and 9th, 2025.
