Policy approaches to scale impact investment in Asia-Pacific

Donor and philanthropic funds add up to billions of dollars. However, the cost of solving the world’s most critical problems runs into the trillions - including an estimated $2.5 trillion annual funding gap needed to achieve the Sustainable Development Goals (SDGs). Private capital is urgently needed to fill this gap.Innovative finance solutions to mobilize private capital in new and more efficient ways towards development objectives have been pursued. One such solution is impact investing. Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. The Addis Ababa Action Agenda contains a commitment to promote social innovation, of which impact investment is a key pillar. However, it is recognized that to truly harness its potential, governments will have to actively work to facilitate the development of investible social enterprises defined as an organization committed to explicitly including social and/or environmental returns as part of its core business while seeking profit or return on investment, the creation of an enabling impact investment climate, and engage the mainstream private sector.