The world faces not only persistent economic and financial uncertainty but also unparalleled resource constraints that are putting pressure on social and environmental systems, particularly in emerging markets. With government finances tightening due to the build-up of historically high debt, the provision of public goods is becoming increasingly dependent on the private sector, and there is a greater need than ever for commercially viable solutions that combine financial innovation and targeted delivery mechanisms to address at scale the world’s most pressing sustainability challenges.

Reflecting this need, as well as an increased attention to natural and social capital, many financial institutions – from large institutional investors such as pension and sovereign wealth funds, to private equity firms, investment banks and asset managers – are shifting from an SRI approach aimed at minimising negative ESG outcomes to a more opportunistic impact investing stance that emphasises the positive effect of capital on solving ESG problems and delivering basic needs. How can this more positive approach be strengthened and its potential optimised?