Making innovative use of CSR
Increasingly, corporations are making their CSR strategies and business objectives converge and considering emerging countries as new high-potential markets. Blended finance - the strategic use of public and philanthropic capital to attract private capital at scale in support of SDG-related investments -, can be leveraged to support this growing trend.
In this context, KOIS was mandated to evaluate how donors, such as USAID, could play a catalytic role in supporting the development and scale-up of impact and CSR investment initiatives in companies worldwide.
Through INVEST, a USAID initiative that collaborates with the global investment community to mobilize investment for development, USAID leverages its resources – grants, technical assistance, guarantees and convening power – to unlock the potential of private capital to drive inclusive growth in countries around the world.
Increasingly, private investors and businesses are looking to emerging markets for better returns and new market opportunities. Encouraging investment in high-impact areas important to USAID such as agriculture, financial services, infrastructure, energy, clean water, health, and education, requires new forms of collaboration between USAID and the investment and business community.
KOIS engaged with multiple corporates, foundations, local businesses and financial institutions, to assess their respective appetites for Corporate Impact Fund (CIF) model and its variations. While the model triggered cautious interest from the stakeholders, notably to strengthen their supply chains, it was generally agreed that a bottom-up approach to selecting financing models tailored to specific needs in a given sector/geography is preferred.
"Private businesses are increasingly looking to developing countries in order to expand their markets and get better returns. While the increased flows of private capital ultimately benefit local economies, entering these markets comes with additional transaction costs, increased risk and lack of information. Agencies such as USAID can help effectively bridge these gaps by using a range of instruments and services.”