This week, we delve into innovations in finance that aim to transcend the goals of traditional impact investing. Our featured article highlights RSF Social Finance’s work in redefining the purpose of capital—placing the creation of equitable, restorative systems at its core. By tackling systemic issues like racial inequity and climate change, new models of regenerative finance illustrates how finance can move beyond returns to foster long-term societal healing.
Our Essential Reads highlight pivotal sustainability initiatives and challenges, from climate finance shortcomings at COP29 to green strategies in Africa. Key stories include climate risks to UK pensions, investments in Egypt's green economy, and England’s private funding mechanisms for nature recovery. Each story show some emerging solutions to the pressing issues of our time.
In our Research Corner, we spotlight a critical review from the Journal of Management Studies. The article examines gaps in impact investing research, emphasizing the need for systems-level analysis to assess true societal outcomes, bridging theory with transformative practice.
Featured Article:
From Impact Investing to Regenerative Finance
In my recent Forbes article, I explored how RSF Social Finance is pushing the boundaries of traditional impact investing and pioneering regenerative finance models. While impact investing seeks a dual mandate of financial return and societal benefit, regenerative finance places the creation of equitable, restorative systems at its core. This shift redefines the purpose of capital, aligning it with long-term systemic solutions rather than short-term gains.
RSF Social Finance exemplifies this approach through initiatives like the Racial Justice Collaborative, which supports Black, Indigenous, and people of color (BIPOC) entrepreneurs and integrates racial equity into funding decisions. CEO Jasper van Brakel explains how regenerative finance transforms money into a tool for circulation and regeneration, not accumulation. By addressing systemic issues such as climate change, inequality, and structural racism, RSF demonstrates the potential of finance as a catalyst for societal healing.
This article highlights how mission-first structures and innovative capital strategies are unlocking new possibilities for systemic change.
Read more: RSF Is Leading The Way In Moving From Impact Investing To Regenerative Finance
Essential Reads:
Finance Is Falling Short
The new climate finance goal agreed at 2024 COP29 fails developing countries. Despite rising climate impacts, the deal provides insufficient, non-binding commitments that favor loans over grants. The $300bn target by 2035 is by most observers accounts inadequate for true climate action and adaptation needs.
Read more: The new climate finance goal agreed at COP29 is a betrayal of developing countries
Climate Risks to UK Pensions
UK pension funds may lose over 20% in returns by 2040 due to climate-related physical and transition risks. Ortec Finance’s analysis highlights disruptions from low-carbon policies and stranded fossil fuel assets, emphasizing urgent adaptation to balance resilience and minimize losses.
Read more: Climate change could cost UK pension funds 20% in returns, research finds
IFC Boosts Egypt's Green Economy
The International Finance Corporation (IFC) committed $605 million to Egypt, supporting green finance, sustainable tourism, and MSMEs. Key initiatives include a $300 million sustainability bond, $155 million for green tourism, and $150 million for MSME financing. These investments advance Egypt's economic growth and green transition.
Read more: IFC Invests $605m to Advance Egypt’s Green Transition, Support SMEs
Private Investment for Nature Recovery
With only 7% of England's land protected, the government aims to achieve 30% by 2030. The revived Environmental Audit Committee inquiry explores leveraging private investments and financial mechanisms to drive nature recovery, focusing on natural capital's role in achieving environmental and economic goals.
Read more: How can we spur private investment to meet 30x30 nature recovery obligations?
African Leaders Unlock Climate Finance
African policymakers are advancing climate finance frameworks post-COP29, focusing on green energy zones and private investment. Initiatives like the Green Investment Dialogue aim to reduce investment risks and attract funding for renewable energy and low-carbon infrastructure, ensuring Africa leads a just and inclusive green transition.
Read more: African policymakers unite to unlock climate finance post COP
CAF Funds SIDS Climate Projects
The Development Bank of Latin America and the Caribbean (CAF) approved a US$15 million loan facility to support small island developing states (SIDS) in addressing climate challenges. The funds will finance pre-investment projects, enhance infrastructure, and promote institutional strengthening, fostering sustainable development in the Caribbean region.
Read more: CAF approves US$15m loans for climate-change projects in small-island states
Green Housing Boost
IFC supports Vinte in Mexico with a $301M package to expand affordable, energy-efficient housing. The Vinte Green PCG Project aims to meet housing needs while aligning with climate goals through green building standards and EDGE certification. This initiative enhances sustainability, competitiveness, and access to quality housing.
Research Corner:
A recent study published in the Journal of Management Studies critically examines the field of impact investing (II), which strives to combine financial returns with measurable societal benefits. Analyzing 104 articles, the review identifies fragmented research across disciplines and highlights a critical gap: the actual societal impact of II remains underexplored. The authors propose integrating systems theory and innovative methodologies, such as life cycle analysis and longitudinal studies, to address this gap and build a holistic understanding of II’s effectiveness.
The regenerative business practices and sustainability innovations highlighted in this week's Regenerative Insights directly tackle the critical issues of corporate responsibility explored in my recent book explored in my recent book, The Profiteers: How Business Privatizes Profit and Socializes Cost.
Quick Takeaways:
Sustainable Finance Requires Collaboration: Partnerships between policymakers and industry are necessary to drive sustainable change.
Pension Fund Adaptation: Mitigate climate risks to protect long-term pension returns.
Green Economic Transition: Use green bonds and tourism to drive national economic shifts.
Private Nature Recovery: Attract private investments for biodiversity goals.
Inclusive Green Energy: Reduce investment risks to boost renewable energy in developing regions.
Climate Support for Small Islands: Enhance infrastructure and pre-investment for small islands to combat climate impacts.
Public Grants Advocacy: Push for public grants over loans to tackle climate crises.
Affordable Green Housing: Expand green housing to meet sustainability and affordability goals.