Abstract
Socially responsible Investing (Impact Investing, Sustainable, Ethical, Green investing) that offers pragmatic and social outcome deliveries have become rapidly adopted financial innovations in Scandinavian countries. Impact investing is considered to be one form of socially a responsible investment strategy in the global arena which considers both financial return and social impact (best intentions, outcomes). This research will evaluate Social Impact Investing (SII) practices with particular attention to the private equity companies NORFUND, which is owned by the Norwegian Ministry of Foreign Affairs. Each of three independent case studies is examined in a comparative analysis based on the following criteria: 1) Economic conditions, 2) investment environment, 3) ease of doing business, 4) performance of the Norwegian Development Cooperation, 5) relevance, 6) constraints and 7) opportunities. Results of the analysis show that success or failure of a given venture is tightly coupled to the political environment and existing infrastructure, both financial and real (roads, power distribution etc…). Suggested improvements based on the analysis include a focus on improving several existing programs.
Highlights
NORFUND's mission has been identified as a providing help to developing countries in order to fight poverty through supporting economic growth
NORFUND and similar organizations are known as Development Finance Institutions (DFI)
In the case of European DFI's, one well known association is the Association of European Development Finance Institutions (EDFI) which consists of fifteen unique DFI's
Summary
NORFUND's mission has been identified as a providing help to developing countries in order to fight poverty through supporting economic growth. This research paper will use this type of example of practical experience as a case study of socially responsible innovative financial instruments in order to understand the complexity and resulting challenges of this potential market instrument. This research indicates that the regulatory regime governing Scandinavian markets and social investment institutions is worth analyzing in order to disseminate best practices of the implementation of SII as a financial innovation. Existing institutions, such as Private Equity Companies Funds, need to be considered in order to understand the factors that will determine defined targets of social investing practices. DFI's exist in many countries throughout the world In some cases, these institutions collaborate through associations. Projects taken on by DFI's generally target developing countries where various forms of investment are projected to have a positive impact on sustainable business growth, leading to reduced poverty
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