by Jindra Cekan | Dec 31, 2024 | 3ie, Accountability, Adaptation Fund, blended finance, climate change, environment, ESG, European Evaluation Society (EES), European Union, Evaluation, ex post evaluation, ex-post evaluation, foreign aid, GIIN, IDEV, Impact, impact investing, international development, Localization, longtermism, Monitoring and Evaluation, OXFAM, Participants, post project evaluation, Private sector, Sustainability, Sustainable Finance
NEW YEAR, NEW SUSTAINABLE US?
Happy 2025!
(Image from: https://plumvillage.org/articles/can-the-new-year-really-be-new)
How will we be new this New Year? It may seem funny as an ex-post sustainability evaluator to write about the future rather than the past :). But ex-post learning is learning from past successes or failures for future improvements. Such learning is part of “longtermism” where “positively influencing the long-term future is a key moral priority of our time. It’s about taking the sheer scale of the future seriously, and how high the stakes might be in shaping it” (which for many of us means learning from the past to do better in the future). “It means thinking about the challenges we might face in our lifetimes that could impact civilisation’s whole trajectory, and taking action to benefit not just the present generation, but all generations to come…. Many social movements have fought for greater recognition for disempowered members of society. Advocates of longtermism want to extend this recognition to future people, too.”
Taking the longer view also means taking a global view and continuing to address the disparities that our economic system generates, and seems to be generating more destructively. As Oxfam’s excellent Inequality annual report tells us, “since 2020, the richest five men in the world have doubled their fortunes. During the same period, almost five billion people globally have become poorer.” At the same time, the UN cites a World Bank estimate that an additional 68 to 135 million people could be pushed into poverty by 2030 because of climate change”. Given the EU is 450 million and US is 330 million, imagine 20-30% of our populations falling into poverty due to changes we can make – but did not – in addressing inequality and a sustainable, liveable planet. I don’t know what your long-term vision for y/our world is, but I’m quite sure adding to global poverty is not on the list.
What can we do anew?
- Where life is stable: Focus on our collective communities and our planet and helping others: the NYTimes on making new year’s resolutions for collective happiness. I would add, we need to make choices from a planetary perspective – I got a plug-in electric hybrid Toyota CHR this year so I would pollute less and am a vegetarian (aspiring vegan) to decrease my tiny share of the 30% of emissions due to our food systems. Am reading the book The Logic of Sufficiency and preparing to read Less is More will help us consume less, as we need less. Remember, as we in the Global North consume less, the Global South is likely to suffer less, as they have caused so little of today’s climate crisis. Generation Climate Europe states: “In 2019, the top 10% of global emitters (771 million individuals) were responsible for about 48% of global CO2 emissions, while the bottom 50% (3.8 billion individuals) were responsible for almost 12% of all emissions.” This is a staggering statistic we all need to act to reverse.
- Take a longer view, doing ex-post evaluations, for sectors such as agriculture, even for disasters: 3ie admitted that only 4% of all impact evaluations include long-term learning about food systems interventions evaluating long-term outcomes (including climate change) and a collection of sustainability learning by IDEV’s Sustainability Matters asks us to take a holistic approach, covering the full spectrum of environmental, social and economic sustainability. Both sources tell us we need to do more evaluation and learning over the longer-term as climate shocks increase. Disaster Science also discusses the need for a longer-term view – this means putting out fires but thinking longer-term (see longtermism above :)) about how we can make our interventions more sustained. We can ‘bake-in’ or ‘hardwire” sustainability as we shared here in a VV blog about health projects. Also this includes evaluating climate adaptation ex-post as the Adaptation Fund has shared (and I spoke at the European Evaluation Society Conference) positive and negative lessons from our ex-post learning from past design/ implementation for future sustainability. Proud that the Fund has created the Adaptation Fund’s toolkit, and in 2025, look for more ex-post learning from the Climate Investment Funds and other clients!
EES Conference presentation – Rimini in 2024 (photo by the Vladislav Arnaoudov)
- Use our money to do more measurable good: pushing the private sector for more equitable investments given public funds to do good are so stretched: Dr G. Marcelle notes that we need transformative sustainable finance (which is environmental, social, and governance (ESG)) to address inequalities and address climate change harm being done. As an evaluator, we need to measure real impact as the Adaptation and Resilience Investors’ Cooperative does or the Global Impact Investor Network (GIIN) which has set up benchmarks in Agriculture, Forestry, Energy, and Finance. And we so need mandatory, transparent and comprehensive reporting which fosters trust, not greenwashing or wishful thinking. Also consider what banks you are funding, some profit from more fossil fuels.
- Appreciate and learn from what works and do more of it, patiently, especially at the community level! This BBC article celebrates 5 successes against biodiveristy loss. This Barbados conference “Sustainable Energy for Equity, Security and Prosperity” I will attend in 2025 (!) may also cover the exciting new debt for climate resilience deal which is the world’s first! IDEV reminds us conservation is most powreful at the community level, but we must learn from monitoring data, locally. IFAD reminds us sustained development takes time and resources and patience.
- What else would you add?
Happy Sustainable New Year, New Us!
by Jindra Cekan | Jan 8, 2018 | foreign aid, GIIN, impact investing, Impact Investors, international development, post project evaluation, Return on Investment (ROI), stakeholders, Sustainable development, Valuing Voices
Impact Investing – International Development’s New Holy Grail?
There are so many things I love about the private sector such as Forbes 18 Dec Quote of the Day: “You’re going to be wrong a fair amount of times. So the issue is, how do you be wrong well?” asked Ray Dalio, Founder of Bridgewater Associate. This is a key issue for impact investors and international ‘developers’ alike.
International development suffers from the myth that failure must be downplayed. Too often only success is highlighted, whereas project shortcomings are framed as: “less successful” “numerous issues affected a less optimal…” Yet by downplaying the less great (Aka awful) results we miss vital learning that private sector expects, learns from and integrates toward the greater success. Why? Many in foreign aid believe (rightly?) such admissions might endanger winning more funding for more projects. Even as recently as 2014, U.S. foreign aid industry websites such as DevEx are still posting: “One can be forgiven for forming the impression that our development efforts are nearly perfect if typical annual reports, scientific conferences and event social media content are the basis for information. Successes are proudly packaged in glossy formats and heavily disseminated, whereas any objectives not achieved are relegated to the obligatory, and typically short, lessons learned section. This practice does not accurately represent an important reality: development efforts do in fact fail” [1].
Admitting failure, posting failure reports are awfully rare in international development, but how bad is it? The Asian Development Bank wrote in a large overview of the sustainability of post-project results, “Some early evidence suggests that as many as 40% of all new activities are not sustained beyond the first few years after disbursement of external funding” [2]. A 2017 Cambridge University study found that “using an original database of over 14,000 small development projects in Ghana, I estimate that one-third of projects that start are never completed, consuming nearly one-fifth of all local government investment” [3]. Even when they do start, complete, and even have salutary results at the end of the project, Valuing Voices research shows quick declines toward failures in as little as two years post exit, such as these post-project results at the AEA 2017 conference. The foreign aid industry is so focused on showing results while conditions are (relatively) conducive, that far fewer than 1% of all projects are evaluated for what was still standing in as little as two years after project closeout, and those are mostly those projects expected to be successful. Sustainable, long-term results suffer from what CGDev researchers are concerned “that pressure to demonstrate results in the short term may undermine efforts to ensure any impact is sustainable….Unfortunately, the pressure to show immediate results can encourage pursuit of agricultural investments unlikely to be sustained” [4]. Luckily there’s a place to go. DevEx reminds us that “Venture capitalists and corporate investors understand that less than 20 percent of new businesses will succeed,” hence my love of the private sector’s admitting, learning and improving that ‘aid’ needs [1].
As a former investment banker (Solomon Brothers) and management consultant (Price Waterhouse & Coopers and Lybrand), I know that the corporates care for results, and do not shy away from pulling money from where things don’t work and put it where they do. 30 years in international development showed me that rigid bureaucracies and fixed ‘project cycles’ and an industry focused on ‘getting money out the door’ lead to a focus on accounting for all funds, but not for changing lives over the long term. Virtually no one calculates return on (our) investment compared to the cost of projects, especially including the value of what projects generate and participants can sustain.
I am quite fervently hoping Impact Investors focused on financial ROI to firms and investors as well as Social Return on Investment will step in, fund gathering and learning from the whole range of ‘returns’. Will they share both financial profits/ losses and feedback from the whole social ‘value chain’ of stakeholders of those involved on what succeeds and fails? Will investors learn from national partners and participants on what should be done better? If yes, all of us will win. I am heartened by cautiously optimistic statements such as Next Billion’s “a core characteristic and challenge of impact investing is the measurement and management of social and environmental impacts alongside financial returns. Development cooperation and impact investing communities can build on their respective experience in results measurement and learn from and with each other” [5]. We can IF we are going to the same place.
From my early look at impact investing, it is a ‘game changer’ with $250 billion in assets looking for a profitable home [6]. UBS Asset Manager Baldinger says “In the past you sold products to your client, now you empower your client to create a desired impact. As an industry, we’ve had to rethink everything we do — impact and sustainability is the Silicon Valley of finance and we want to be the Google” [6]. These are happy words to someone focused on sustained (and emerging) impacts but among impact investors, so far, ‘impact’ seems to be thrown about as specifically as ‘results’, and GIIN ‘sustainability’ metrics are so wide ranging as to illuminate less quality than quantity. So far, much of their metrics look more like outputs relevant to companies (‘clients served’, ‘new investment capital’) that results of SROI. While there is something to be said about measures of ‘organizations trained’, ‘poverty assessments’ done, at least as a start, yet does ‘gross profit’ indicate that corner of the world is better off (and does this measure the investment into the enterprise, or is this of the investment fund itself)? Does ‘communities served’ and ‘social impact objectives’ illuminate the quality of the impact on lives changed? Is anyone asking how long-lasting, and sustained these investments, measuring what I call SUStained Return on Investment (SUSROI), will be after these investors leave (which is what I suspect most investment participants and millennial investors think they’re buying)?
This is the start of a series of blogs exploring how we who care about generating and evaluating sustained impacts can learn from, inform, (gasp) shape impact investing’s gargantuan footprint in international development. Powerhouses such as the Rockefeller Foundation, Ford Foundation and Soros are looking, teaching, investing, and all public and private equity as well as a whole range of other investors now invest in this new hybrid [7][8]. Who else is? What can we learn to make the world better? What do you think: Is impact investing development’s holy grail?
Sources:
[1] Petruney, T. (2014, December 12). Facing global development’s fear of failure. Retrieved from https://www.devex.com/news/facing-global-development-s-fear-of-failure-85078
[2] Asian Development Bank. (2010, October 31). Post-Completion Sustainability of Asian Development Bank-Assisted Projects. Retrieved from https://www.adb.org/documents/post-completion-sustainability-asian-development-bank-assisted-projects
[3] Williams, M. J. (2017). The Political Economy of Unfinished Development Projects: Corruption, Clientelism, or Collective Choice? American Political Science Review, 111(4). Retrieved from https://www.cambridge.org/core/journals/american-political-science-review/article/political-economy-of-unfinished-development-projects-corruption-clientelism-or-collective-choice/1351C9A6EB64B39B0D3A2B0A2D748412
[4] Elliott, K. A., & Dunning, C. (2016, March 1). Assessing the US Feed the Future Initiative: A New Approach to Food Security? Retrieved from https://www.cgdev.org/publication/assessing-us-feed-future-initiative-new-approach-food-security
[5] Next Billion. (2017, November). Financing Global Development – Leveraging Impact Investing for the SDGs. Retrieved from https://nextbillion.net/calendar/financing-global-development-leveraging-impact-investing-sdgs/
[6] Kennedy, E. (2017, December 18). Impact investing: A $250 billion game-changer for finance. Retrieved from https://www.cnn.com/2018/09/27/investing/impact-investing-wall-street-banks-asset-managers/index.html
[7] Ford Foundation. (2017, April 5). Ford Foundation commits $1 billion from endowment to mission-related investments. Retrieved from https://www.fordfoundation.org/the-latest/news/ford-foundation-commits-1-billion-from-endowment-to-mission-related-investments/
[8] Karabell, S. (2013, August 14). Impact Investing, Soros-Style. Retrieved from https://knowledge.insead.edu/responsibility/impact-investing-soros-style-2576
