Public Engagement, World Economic Forum, public.affairs@weforum.org
Geneva, Switzerland, 28 January 2021 — The COVID-19 pandemic could plunge 100 million more people into extreme poverty, according to the World Bank, at a time when aid budgets are being cut. The private sector has a key role to through investing in sustainable recovery and resilience of vulnerable communities.
In a report published today, Unlocking Humanitarian and Resilience Investing through Better Data, the World Economic Forum and Gulf International Bank (GIB) Asset Management as part of the Humanitarian and Resilience Investing Initiative issued a call to the private sector to work with humanitarian and development agencies and standard-setters to generate the data investors need. This would steer meaningful resources towards strengthening recovery and resilience among communities hit hardest by conflict and crisis.
Humanitarian and resilience investing is an emerging theme at the sharp end of the sustainable investment portfolio and shares similar goals to impact investment – generating positive social and environmental impacts while tolerating higher risks and below-market returns. The market for impact investment stood at around $715 billion by the end of 2019, up 43% year-on-year.
The Forum’s report identifies a lack of reliable data as a critical barrier impairing the identification, appraisal and due diligence of potentially high-impact, bankable HRI transactions. The report highlights some case studies showing the value of good data. In the Democratic Republic of Congo (DRC), Philips, the Dutch multinational, found that data on traceability and verification were critical in ensuring a conflict-free supply chain for tin, while empowering unemployed miners.
The International Committee of the Red Cross (ICRC) has raised around CHF26 million of capital through its humanitarian impact bond to provide physical rehabilitation for people disabled by conflict and disaster in Nigeria, Mali and DRC. Returns on the bond were linked to the performance of ICRC’s programme against pre-specified metrics.
The report identifies shortcomings in available data. Information at an initiative level is critical, but hard to find. Existing metrics are not standardized, making comparisons across organizations and sectors difficult. Data on social impacts and resilience-building – needed to enable HRI – is notoriously hard to collect. And much of the current data focuses on short-term response rather than on crisis prevention and recovery.
The Forum and GIB Asset Management call on all organizations with an interest in strengthening crisis resilience – including businesses, investors, standard-setters, donors, philanthropists and humanitarian organizations – to collaborate in creating more effective data solutions to unlock the full potential of investment finance as a force for good among some of the world’s most disaster-affected communities.
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