Launched by a pioneering group of banks and investors on January 30th, 2017 in Paris, The Principles for Positive Impact Finance are a framework to help banks and investors adopt an impact-based approach, so they can step up their positive impact on the economy, society and the environment, and, more specifically, actively participate in bridging the financing gap for sustainable development.
By jointly considering the three environmental, social and economic pillars of sustainable development and by calling for appraisal of both positive and negative impacts, they propose a holistic approach to delivering sustainable, mainstream financial products and services.
The development of a dedicated set of Principles for Positive Impact Finance, constitutes a central component of the Positive Impact Roadmap outlined in the Manifesto. Their deliberately holistic approach is designed to help uncover the financial value of impact and to enable the development of the new lines of business and business models needed to achieve the SDGs. We call this impact-based business and finance.
The Principles for Positive Impact Finance
PRINCIPLE ONE: Definition
Positive Impact Finance is that which serves to finance Positive Impact Business. It is that which serves to deliver a positive contribution to one or more of the three pillars of sustainable development (economic, environmental and social), once any potential negative impacts to any of the pillars have been duly identified and mitigated. By virtue of this holistic appraisal of sustainability issues, Positive Impact Finance constitutes a direct response to the challenge of financing the Sustainable Development Goals (SDGs).
PRINCIPLE TWO: Frameworks
To promote the delivery of Positive Impact Finance, entities (financial or non financial) need adequate processes, methodologies, and tools, to identify and monitor the positive impact of the activities, projects, programmes, and/or entities to be financed or invested in.
PRINCIPLE THREE: Transparency
Entities (financial or non financial) providing Positive Impact Finance should provide transparency and disclosure on:
- The activities, projects, programs, and/or entities financed considered Positive Impact, the intended positive impacts thereof (as per Principle 1);
- The processes they have in place to determine eligibility, and to monitor and to verify impacts (as per Principle 2);
- The impacts achieved by the activities, projects, programs, and/or entities financed (as per Principle 4).
PRINCIPLE FOUR: Assessment
The assessment of Positive Impact Finance delivered by entities (financial or non financial), should be based on the actual impacts achieved.
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