Financing Impact

Financing Impact is an interview podcast about funding and scaling societal innovation. It is brought to you by SciFi, the Societal Impact Financing Initiative at ESMT Berlin.

Insuring climate risk - with Helke Waelde and Daniela Zimmermann 01/30/2025

Insuring climate risk - with Helke Waelde and Daniela Zimmermann In episode 15, we discuss how insurance can increase resilience to climate risk. Our two guests and their respective organizations cooperate to provide climate risk insurance for developing countries. Dr. Helke Waelde is a senior sector economist at the KfW Development Bank, and Dr. Daniela Zimmermann is senior manager for regulatory affairs at the reinsurance company Hannover Re. In cooperation on climate risk solutions such as the Natural Disaster Fund (NDF), insurance policies are provided which lead to a quick payout to beneficiaries in developing countries in case of an extreme weather event. So-called parametric insurance solutions are geared towards providing quick liquidity when a pre-determined extreme weather event occurs. They thereby put the policyholders, for example governments of developing countries, in a position to provide quick relief to affected populations. KfW Development Bank and Hannover Re also work jointly on policy briefs to inform discussions around the financial contributions of the Global North to address climate risk in developing countries. Links · · · · · Timestamps On some podcast players, you should be able to jump to the section by clicking: (01:34) – Helke and Daniela introduce themselves (06:19) – Difference between an insurer and a reinsurer (08:31) – The role of reinsurance in diversifying risk (09:28) – KfW’s mandate as a development bank and the need to insure climate risk (10:48) – The 3 tasks of KfW when it comes to climate risk (11:38) – Providing fast liquidity to partner countries in the case of a climate event (13:06) – The Natural Disaster Fund (NDF) (13:35) – Explanation of parametric solutions (14:25) – More details on the Natural Disaster Fund (NDF) (17:09) – Working with financial inclusion providers (19:02) – Role distribution between the partners involved in the NDF (22:18) – Responsibility of the Northern Hemisphere towards developing countries (23:53) – Attribution theory policy paper (29:03) – What is needed to mobilize more private investment for climate finance (32:42) – The importance of a stable and reliable legal and regulatory framework and access to cross-border reinsurance possibilities Contact For feedback on the show or to suggest guests for future episodes, contact us at [email protected] /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/35084775

Bridging the climate finance divide – with Mahmoud Mohieldin 12/12/2024

Bridging the climate finance divide – with Mahmoud Mohieldin For our 14th episode, I invited Dr Mahmoud Mohieldin to discuss the climate finance divide and how to overcome it. The climate finance divide is the gap between the funding needed and funding available to tackle the global climate crisis. It is particularly stark in developing and emerging economies, as these countries face high levels of debt and limited sources of public revenue. Because developing countries are responsible for far less of the Co2 emissions than developed countries, yet suffer more from the consequences of it, bridging the climate finance divide calls for international solutions. My guest just returned from COP29 and shares his insights from there and from his career dedicated to finance and international development. Dr Mahmoud Mohieldin is an economist who has held roles as Executive Director of the IMF Group, Senior Vice President at the World Bank and Minister of Investment of Egypt. Currently, he is UN Special Envoy for Financing the 2030 agenda. Links · · · · · · Timestamps On some podcast players, you should be able to jump to the section by clicking: (01:46) - Mahmoud Mohieldin introduces himself (03:53) – Climate finance is insufficient, inefficient, and unfair (07:46) – Bias against adaptation finance (13:12) – Debt-for-climate-swaps (14:37) – Bilateral and multilateral financing institutions as risk mitigators or credit enhancers (16:25) – Perceived risk vs real risk in developing and emerging markets (17:39) – The role of guarantees to bring in more private capital (19:46) – COP29 in Baku (20:43) – Article 6 of the Paris Agreement (21:45) – The NCQG (New Collective Quantified Goal for climate finance) (24:46) – Policy developments in the United States / Inflation Reduction Act (31:59) – The Sharm-El-Sheikh Adaptation Agenda (33:53) – Blended finance Contact For feedback on the show or to suggest guests for future episodes, contact us at [email protected] /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/34411265

Financing climate tech – with Baris Efe and Danijel Višević 12/05/2024

Research-Practice Partnerships - with Katia Halabi and Raji Jayaraman 06/05/2024

Research-Practice Partnerships - with Katia Halabi and Raji Jayaraman In our 12th episode, Katia Halabi and Raji Jayaraman explain and discuss research-practice partnerships (RPPs) and share their experiences. Katia is a practitioner and head of the TVET (technical and vocational education and training) component of a project commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in Rwanda with co-funding by the European Union. Raji is a researcher and professor of economics at ESMT Berlin as well as the co-director of the Forward Society Lab. We explore the characteristics of RPPs, and how such a partnership is implemented in an ongoing project in Rwanda. We delve into the role of quantitative data and rigorous evidence in policymaking and of course discuss how this is linked to financing impact with taxpayers’ money. Links · Time stamps On some podcast players, you should be able to jump to the section by clicking: (01:24) – Raji and Katia introduce themselves (02:11) – Raji explains what a research-practice partnership (RPP) is (02:47) – The role of rigorous evidence to inform policy decisions (03:44) – Katia shares her motivation as a practitioner to engage in an RPP (05:00) – The matchmaking exercises that brough practitioners and researchers together (07:22) - Katia explains the context of the project she is working on in Rwanda (09:43) – Raji explains what is evaluated in this RPP: whether training makes a difference for both teachers’ pedagogy as well as students’ learning outcomes (10:37) - The role of randomization to generate rigorous evidence (12:56) - Katia describes the motivation of the Rwanda government to learn from the RPP (14:32) – Raji on the necessity for research to speak to concerns of citizens and marginalized communities (17:36) – Katia on why the use of taxpayers’ money should be evaluated (21:09) – Raji shares examples of things that cannot be evaluated through an RCT (randomized control trial) (23:47) – Success factors for collaboration between researchers and practitioners (29:04) – What happens after an RPP (32:35) – Differences between countries when it comes to research informing policy (35:32) – RPPs are not exclusive to development cooperation (36:43) – The role of AI for research Contact For feedback on the show or to suggest guests for future episodes, contact us at /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/31611632

Impact investing in frontier markets – with Patrick Nussbaumer and Winnie Odhiambo 04/16/2024

Impact investing in frontier markets – with Patrick Nussbaumer and Winnie Odhiambo In our 11th episode, and discuss impact investing in frontier markets. Patrick works for ’s innovative finance division, and Winnie is an impact investing professional whose career spans working with pension funds, VCs, in private equity and in private debt. We explore the role of development finance institutions (DFIs) in impact investing and how to mitigate country risk in emerging markets. We also discuss the need for more investments into climate adaptation, and the specific challenges of impact measurement in this field. Links: · · report on · the Private Financing Advisory Network, is · UNIDO’s is accelerating and de-risking innovation in frontier markers · Development finance institutions (DFIs) active in emerging economies include , the , and . · Patrick’s analysis on · The produced with input from the Working Group in which Patrick is active · The research on mentioned by Patrick Time stamps On some podcast players, you should be able to jump to the section by clicking: (01:47) – Winnie and Patrick introduce themselves (05:45) – Winnie’s and Patrick’s approach to impact investing (08:59) – Winnie’s role in facilitating transactions (10:53) – Impact measurement in climate adaptation vs climate mitigation (16:28) – The role of development finance institutions (DFIs) in mobilizing investment in emerging markets (18:26) – Investing in SMEs in emerging markets (23:40) – Mitigating country risk (25:42) – The role of local financial institutions (28:42) – UNIDO’s role in facilitating transactions. (31:37) – The need for more investment into climate adaptation (34:39) – The difference between adaptation and resilience (37:15) – The need for investment in post-conflict economies (39:06) – Geographic concentration of impact investing and wealth concentration (40:27) – Incentivizing impact at fund manager level (43:51) – Winnie predicts increasing regulatory scrutiny towards impact investors, especially those raising funding from public sources Contact For feedback on the show or to suggest guests for future episodes, contact us at /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/30844573

Malengo - with Gladys Amule, Johannes Haushofer and Richard Nerland 08/02/2023

Malengo - with Gladys Amule, Johannes Haushofer and Richard Nerland In our 10th episode, we take a deep-dive into Malengo, an organization that facilitates international educational migration. Malengo helps students from low-income countries with admissions and financing for a bachelor’s degree in a high-income country. We discuss why migration is an important lever for development, and how income-share agreements can make supporting it a worthwhile impact investment. Our guests bring in 3 different perspectives. Johannes Haushofer is a development economist who founded Malengo based on findings from his research. Richard Nerland is an economist with a passion for academic economics and international development. Convinced by Malengo’s potential for impact, he invested USD 3.5 M into the organization. Along the way, he helped develop a tax-efficient financial model to make Malengo attractive for other investors to follow suit. Gladys Amule is a student from the first cohort of Malengo scholars. She shares her experience with the program and her motivation to pay it forward through Malengo’s income-share agreement. Links · · · Academic papers recommended by our guests · , D., J. , E. , P. , and M.. 2022. “General Equilibrium Effects of Cash Transfers: Experimental Evidence From Kenya” Econometrica. · Clemens, Michael, A. 2011."Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?" Journal of Economic Perspectives, 25 (3): 83-106. DOI: 10.1257/jep.25.3.83 · : Blattman, C.,N. Fiala, N. and S. Martinez, 2019. “The Long Term Impacts of Grants on Poverty: 9-Year Evidence from Uganda's Youth Opportunities Program”. · : Abarcar, P., and C. Theoharides; C. 2021. “Medical Worker Migration and Origin-Country Human Capital: Evidence from U.S. Visa Policy”. The Review of Economics and Statistics. · Khanna, G., E. Murathanoglu, C.B. Theoharides and D. Yang, 2022, “Abundance from Abroad: Migrant Income and Long-Run Economic Development”, National Bureau of Economic Research, Working paper 29862, DOI 10.3386/w29862 · Burchardi, K. Chaney, T. and Hassan, T. 2018, Migrants, Ancestors, and Foreign Investments, The Review of Economic Studies, Volume 86, Issue 4, , Pages 1448–1486, Time stamps In some podcast players, you should be able to jump to the section by clicking: (00:01:56) – Johannes, Gladys and Richard introduce themselves (00:03:19) – Johannes explains what Malengo does and how his academic research inspired him to found an organization facilitating international educational migration (00:10:27) – Gladys shares why she applied to study with Malengo (00:14:19) – Richard shares why he decided to fund work related to international educational migration, inspired by reading academic papers on development economics (00:17:07) – Richard elaborates on how Johannes’ academic credentials and track record as high agency person convinced him to support Malengo’s work (00:19:47) Richard on giving vs impact investing – the investor’s perspective (00:22:10) Richard on the process of jointly setting up a legal structure for impact investing with Johannes (00:25:36) Johannes on seeking donations vs seeking investments – the founder’s perspective (00:27:23) Johannes on Richard providing more than just money: expertise and patience (00:28:31) A structure that can now be deployed at scale (00:30:37) Gladys on what she would have done if she hadn’t studied with Malengo (00:31:20) Johannes on the expected impact on student’s income and the independent research accompanying Malengo’s work (00:34:08) Gladys on sending money back home (00:35:46) Johannes on the income-share agreements (00:39:15) Gladys on her motivation to pay it forward (00:40:22) Johannes on why he isn’t worried about brain drain (00:43:28) Gladys on inspiring other students (00:44:43) Richard on the academic papers that influenced his thinking on what works and what doesn’t in development economics (00:48:27) Richard on how “this one little thing that he’s very good at”, “this little finance thing”, can empower others (00:50:27) Gladys on her role as a mentor for the next Malengo cohorts (00:52:19) Richard’s deep dive into how he thinks about his investments into Malengo from a financial perspective (protection from inflation, assumptions for alpha outperformance, diversification from the rest of his portfolio from a market risk perspective) (00:59:36) Johannes on the impact evaluations embedded in Malengo’s work and the endeavor to also uncover whether there are negative effects (01:03:06) Gladys on how leaving home felt for her (01:07:08) Johannes on the role of philanthropy, impact investing and effective altruism for Malengo (01:09:03) Richard on hoping to inspire other impact investors to follow suit (01:14:20) Johannes on how the political climate affects his plans to grow an organization facilitating migration (01:15:50) Gladys on interest from her peers to follow in her footsteps (01:16:45) Johannes on a mindset of cooperation towards other organizations in the same space (01:19:31) Johannes, Richard and Gladys on the best ways to support Malengo’s mission /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/27632589

Institutional investors and net zero - with Brunno Maradei and Wiebke Merbeth 06/13/2023

Institutional investors and net zero - with Brunno Maradei and Wiebke Merbeth In our ninth episode, Brunno Maradei and Wiebke Merbeth discuss the role of institutional investors in achieving net zero. Institutional investors such as pension funds or insurers invest on behalf of others. Wiebke is member of the Sustainable Finance Advisory Committee to the German Government and a partner at Deloitte, and Brunno is Global Head of Responsible Investment at Aegon Asset Management. Both point out that the sheer trillions of € that institutional investors manage make them key stakeholders for a transformation agenda involving financial markets. We discuss the toolbox institutional investors have at their disposal, but also that their strategies don't work in isolation. They have to be seen the context of alliances, technological progress on ESG data collection, and of course: regulation. Links: · Statista and the · · · · Time stamps On some podcast players, you should be able to jump to the section by clicking: (01:35) – Wiebke and Brunno introduce themselves (03:43) – The importance of institutional investors for net zero (05:51) - The role of regulatory developments in achieving net zero (08:14) - The importance of the Paris Agreement (08:49) - Analogy with divestment in the tobacco industry (10:57) - The role of public opinion for sustainable finance (14:53) - The cost of the climate crisis and of sovereign debt for future generations (17:41) - Investing in climate change mitigation is a type of insurance – and insurance is difficult to sell (19:32) - Stewardship vs divestment (22:24) - Sustainability is an alliance issue (25:08) - The evolution of ESG data quality (28:09) - Get rid of the formulation “non-financial reporting” (29:47) - Beyond carbon – the other aspects of ESG (33:30) - Minimum standards and the sources of reporting (38:41) - Combative engagement vs soft engagement (40:52) - Blended finance (45:21) - Outlook on regulatory developments Contact For feedback on the show or to suggest guests for future episodes, contact us at [email protected] /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/27139776

Impact investing in EdTech - with Marie-Christine Levet and John Soleanicov 05/16/2023

Impact investing in EdTech - with Marie-Christine Levet and John Soleanicov In our eight episode, we discuss impact investing in EdTech. Our guests bring a complementary perspective: Marie-Christine Levet is founding partner at Educapital, a European EdTech VC that closed its second fund with a €150 million closing. John Soleanicov works for the Jacobs Foundation, which committed CHF 30 million to impact investments into EdTech, and CHF 10 million funding for accompanying research. We discuss the rationale for promoting EdTech and the complementary roles of grants and impact investments. We hear about Educapital’s and the Jacobs Foundation’s approach to impact measurement, and how Marie-Christine incentives her team to strive for more impact. Our conversation also touches upon what business models based on advertising mean for inclusion and educational sovereignty. Links · This explains the Jacobs Foundation’s CHF 40 million commitment to global EdTech research and investment · includes · John cited the as a framework that helps assess qualitative differences in impact measurement. Timestamps On some podcast players, you should be able to jump to the section by clicking: (01:57) - Marie-Christine and John introduce themselves (09:17) - Why the Jacobs Foundation does impact investing through grant making and not via an endowment (12:21) - The impact indicators used by Educapital (16:32) - How the Jacobs Foundation promotes uptake of evidence on what works in EdTech through investor demand (19:45) – Reconciling education as a public good with the role of private sector incentives to accelerate change (21:00) – Research and investing are different, yet both need data (24:41) - How Educapital incentivizes impact through the carry of the fund (26:39) - Certification for different levels of evidence related to education products (31:18) - The need for a European EdTech industry to maintain educational sovereignty (40:29): - Why impact-linked compensation is a stronger signal than SFDR article 9 (41:50) - On sourcing impact investments (44:14) - Outlook for the Edtech sector Contact For feedback on the show or to suggest guests for future episodes, contact us at /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/26857770

Impact investing in public markets - with Krisztina Tora and Eric Rice 01/09/2023

Impact investing in public markets - with Krisztina Tora and Eric Rice In our seventh episode, we discuss impact investing in public markets with Krisztina Tora and Eric Rice. Krisztina is Chief Market Development Officer at GSG, the Global Steering Group for Impact Investment. Eric is head of Active Equities Impact Investing at Blackrock, the world’s largest asset manager. In our conversation, we discuss what makes impact investing through the stock market different from investing in private equity or other asset classes. We talk about what it takes to democratize impact investing and the role of shareholder engagement to achieve impact. Eric shares Blackrock’s strategy to build a universe of potential impact companies and explains how his team selects investees out of this universe. Krisztina walks us through the different standards for impact measurement. Our conversation also touches upon the role of the 17 UN Sustainable Development Goals (SDGs) to mobilize capital. We discuss that investments geared toward SDGs can achieve returns. Links The The offers numerous tools for setting strategies around impact measurement Harvard’s seeks to drive the creation of financial accounts that reflect a company’s financial, social and environmental performance Krisztina recommends the to understand market signals of diversity, equity and inclusion Blackrock showcases it’s approach to impact investing in the Timestamps On some podcast players, you should be able to jump to the section by clicking: (01:51) – Krisztina and Eric introduce themselves (07:44) - The continuum of capital (10:55) – Market rate returns or concessionary returns? (11:58) – Distinguishing impact investing from ESG (12:55) - Democratizing impact investing through public markets (16:45) - Added value of the investor to achieve impact (additionality) (24:21) - Blackrock’s approach to build an universe of investible of impact companies (28:03) - GSG’S SDG Investor Opportunity maps in cooperation with the UN (33:38) - Shareholder engagement (38:50) - Best in progress vs. best in class (46:02) - The harmonization of standards related to impact investing (51:05) - The move towards auditing in impact measurement (52:31) - The rationale for long-term investing (01:00:48) - Social justice, diversity and inclusion Contact For feedback on the show, or to suggest guests for future episodes, contact us at /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/25544616

Deep impact investing - with Charly Kleissner 09/05/2022

Deep impact investing - with Charly Kleissner In our sixth episode, Charly Kleissner shares his investment philosophy, which he calls “deep impact investing”. Charly came into wealth as a technologist building several very successful companies in Silicon Valley. He developed the basis for what later became Apple’s OS with Steve Jobs at Next, but considers the B2B eCommerce company Ariba his masterpiece. Since selling his Ariba stock, Charly has devoted himself to impact investing to give meaning to his wealth. He co-founded Toniic, a network for likeminded impact investors, to share knowledge and deal flow. Under the umbrella of Toniic, he also launched the 100% Network, a group of more than 160 asset owners committed to investing all their wealth towards positive impact. With portfolio sizes ranging from more than 1 million to more than 500 million, they have jointly committed 6 billion USD, with more than half currently deployed. Some of these portfolios are the basis for the T100 project, a longitudinal study of investments fully oriented towards impact. We discuss the role of research to analyze risk-return-impact profiles. Charly reflects on his role shaping the impact investing ecosystem and shares his thinking around systemic change as opposed to incremental progress. He also shares why he is opposed to cryptocurrency speculation but believes blockchain technology and tokenization hold promise for the future of impact investing. Links Charly co-founded the , a global community of asset owners seeking deeper positive net impact through their investments. The is a subgroup of members committed to direct all their investable wealth towards impact. Otto Scharmer’s book influenced Charly’s approach to building trust in networks. Toniic has initiated the , a longitudinal study of investment portfolios 100% activated towards deeper positive net impact in every asset class. In addition to producing practitioner reports, it works with the Center for Sustainable Finance and Private Wealth (CSP) under the leadership of Dr. Falko Paetzold to publish . Arne Naess’ work around (a term coined in a 1973 article) led Charly to come up with the concept of “deep impact”. To analyze whether investments are systemic in nature, Charly points to John Fullerton’s and Kate Raworth’s . Charly recently wrote his personal reflections and call to action on . Timestamps On some podcast players, you should be able to jump to the section by clicking: (01:57) – Charly’s background and motivation for impact investing (07:12) – The process for sourcing an impact investment (07:26) – The Toniic network (09:01) – The investors aligning 100 % of their portfolio towards impact (11:28) – How to establish trust in networks (15:48) – Research on the impact-risk-return correlation and the aspiration to develop a post modern portfolio theory (19:41) The value of data vs. the value of insights (22:32) The ESG movement (27:25) System change (28:45) Social impact bonds (32:34) The need for public-private collaboration to make progress on the SDGs (37:30) Blended capital to finance social entrepreneurship (42:49) On market rate returns as a benchmark (48:51) Tokenization (01:00:17) Consciousness and deep impact Contact For feedback on the show, or to suggest guests for future episodes, contact us at /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/24277356

Fostering social innovation – with Gorgi Krlev and Dominik Domnik 07/06/2022

Fostering social innovation – with Gorgi Krlev and Dominik Domnik In our fifth episode, Gorgi Krlev and Dominik Domnik discuss what it takes to foster innovation that benefits society. We delve into what social innovation is, and what role public policy and specific funding instruments play for the growth of the sector. Gorgi is an assistant professor of sustainability at ESCP Paris. He has conducted a study comparing and assessing approaches from 10 different countries to support social innovation. Dominik works for LMU’s Innovation and Entrepreneurship Center. He has previously worked for a foundation and a family office and set-up his own social business. They discuss the rationale for factoring in the long-term benefits for society when investing into innovative solutions to societal problems, whether you are a policy maker or an investor. We also address jargon and how to bridge cultural differences between the private sector, the public sector, and civil society to jointly promote social innovation. Links Gorgi conducted the study “” on behalf of SEND, the German Social Entrepreneurship Network. Examples mentioned by Gorgi and Dominik: is a government initiative aimed at stimulating the social investment market in Portugal. It mobilizes around EUR 150 million from the European Social Fund through 4 financing instruments: , , , and the . develops early stage social businesses through investment, business support and cross-sector partnerships. It has been launched by Big Issue Invest in partnership with the Scottish Government and the University of Edinburgh. The received an endowment capital fund of approximately 84 million euros from the Bank of Finland and the Finnish Parliament. Sitra’s work is funded by the returns from its capital. Investments up and running and underway include , e.g. with a focus on Type 2 diabetes prevention. For feedback on the show or to suggest guests for future episodes, contact us at /episode/index/show/d896d40c-fa5e-45e8-b374-ad53444d407e/id/23648972

Systems thinking for climate finance – with Dominic Hofstetter and Kirsten Dunlop 06/01/2022

Power dynamics in funding – with Marta Zaccagnini and Ben Wrobel 03/31/2022

Funding social businesses - with Aunnie Patton Power and Julia Winkler 03/07/2022

Dormant assets - with Stephen Muers and Antonis Schwarz 02/01/2022

Financing Impact

TOPICS