Financing the sustainable development goals : an exploratory analysis of impact investing intermediaries located in Belgium and Luxembourg

Abstract

The aim of this Master thesis is to describe the ecosystem of Impact Investing ‘for development’ and to analyse the best practices of impact investing intermediaries to contribute to the achievement of the 2030 Agenda. According to the “The Impact Imperative for Sustainable Development” framework published in 2019 by the OECD, intermediaries need to attract investors and invest efficiently (‘financing imperative’), foster innovation (‘innovation imperative’) and measure impact on development (‘data imperative’). A qualitative research was conducted via semi-structured interviews with ten intermediaries located in Belgium and Luxembourg. The main finding is that the ecosystem is composed of four different models of intermediaries and that certain investment practices have merely been rebranded under the term Impact Investing. Regarding the financing of the SDGs, the intermediaries are attracting public and private investors, but overall the market remains small and the capability to attract ‘new’ capital continues to be debatable. In terms of the ‘innovation imperative’, the intermediaries are looking for innovation, but there are no specific methods or criteria except benchmarking. As to the ‘data imperative’, it was found that the intermediaries are gradually aligning their strategy to the SDGs. Since the goals are well-known, generally accepted and easy to understand, they are mainly used for external and investor communication. Eventually, the effort in recent years to navigate towards a more global approach for development materialised by the SDGs has led to a greater diversity of the ecosystem and its investment practices. Without a clear set of best practices, there is a potential risk of the complete appropriation of this term by commercial investors as a marketing tool. Future research should, inter alia, include a multi-stakeholder approach and consider field observations of the best practices.