The Impact World this Week: 31 May 2024

The most interesting news snippets from around the world. This week: A new fund sets out to help Asia’s underserved communities in the AI job race and
diverse social entrepreneurs face major barriers to access funding in Scotland.

Europe: A landmark EU directive that will hold big companies accountable for the negative impact of their supply chains has at last become EU law – but questions remain as to how effective it will be. On 24 May, the European Union officially adopted the Corporate Sustainability Due Diligence Directive (CSDDD), which requires large companies to conduct due diligence on environmental impacts and human rights across their supply chains, as well as taking measures to prevent and limit any negative impacts identified. The law, several years in the making, has been hailed as a success, but campaign groups have warned that it is full of “loopholes” and exceptions, as a result of the compromise needed to obtain unanimous approval from member states. In a post on Linkedin, B Lab Global’s co-chair Katharine Hill highlighted that much is left to do as the directive still needs to be implemented in member states.

Global: More than 160m women, girls and gender minorities in the Global South benefited from more than US$454m in gender-lens investment catalysed by Singapore-based Impact Investment Exchange (IIX) in 2023, according to their latest impact report. The funds were raised by more than 1,300 investors in various sectors including clean energy, agriculture and waste management – preventing the release of 1.9m tons in CO2 emissions. The report also highlights the pricing of the Women’s Livelihood Bond 6 (WLB6) at US$100m, making it the largest orange bond on the market

Scotland: 70% of investment providers do not have targets for investing in ethnic minority social entrepreneurs, according to a new report conducted by social enterprise Dechomai alongside social investors Firstport and Social Investment Scotland (SIS). Access Report: Investigating Access to Finance for Ethnic Minority Social Entrepreneurs in Scotland was released on 29 May. It identifies the barriers that prevent ethnic minority social entrepreneurs in Scotland from accessing social investment products, such as low awareness of the social investment market, little or no wraparound support during the application process and low levels of trust in financial institutions. The report also outlines recommendations that could increase access to social investment among ethnic minority social entrepreneurs.

Europe: A multi-year programme to support philanthropic organisations to use impact investing was launched on 27 May by impact investing network Impact Europe and European philanthropy association Philea. The programme, which will include events, gatherings and policy support, is aimed at equipping Europe’s philanthropic organisations with the knowledge to incorporate impact investing approaches into their grantmaking or achieve social impact through their endowments. To mark the launch of the programme, the two organisations also published a joint paper titled Philanthropic Organisations Using the Entire Toolbox for More Impact, which delves into the potential of catalytic grantmaking and identifies existing legal or statutory barriers to impact investing.

Scotland: Financial Inclusion for Scotland is urging the Scottish government to allocate £20m in new dormant assets funding to fight financial exclusion in the country. The organisation is putting forward a proposal for a 'First Loss Fund’ to increase access to affordable credit for vulnerable people who would not otherwise be able to access mainstream finance. The Dormant Assets Scheme uses financial assets held in unused accounts to invest in social and environmental initiatives across the UK. It was expanded two years ago to include dormant funds held in insurance policies, pensions, investment management and securities, potentially unlocking an additional £880m, UK-wide. It’s up to the Scottish government to decide where the Scotland portion of the funding will go, and it is expected to hold a consultation on where the new funds should be allocated. So far in Scotland, dormant assets money was used to finance youth projects; in England, financial inclusion initiatives have received some funding from dormant assets since the inception of the scheme in 2011.

Figure of the week: US$15m. That’s the size of the AI Opportunity Fund, a three-year programme launched by AVPN with the support of and the Asia Development Bank to help Asian underserved communities in the AI jobs race. The programme aims to equip Asia's workforce with essential AI knowledge and tools so that more people in the region, especially from underserved communities, can access employment opportunities created by the new technology. The fund will be available through an Open Call to identify and select the non-profit organisations, social enterprises and workforce associations in Asia Pacific to meaningfully reach the workers who will be most impacted by the workforce transitions caused by AI.