A Guidance Note: Building the Evidence Base for Impact Investing and Impact Economies

This guidance note presents a collection of learnings for GSG National Partners (NPs) and other market builders to apply in their work as they engage in effective advocacy for the promotion of impact investing and impact economy-focused policy changes. 

While GSG National Partners (NPs), as locally-led market leadership organisations for impact investing, often exchange information with local researchers or think tanks, there have been limited formal efforts to collaborate to build the local evidence base toward the achievement of shared long-term and strategic goals.

GSG Impact and its affiliated NPs come up against two key barriers that hinder the uptake of impact investing practices. These include:

• the lack of a well-developed evidence base for impact investing
• the need to bridge knowledge and capacity gaps among stakeholders - policymakers, regulators, and investors - well-positioned to bring about the delivery of positive social and environmental outcomes.

A set of solutions to these challenges stands out. By forging more systematic collaborations between NPs and local research institutes, evidence can be generated and put into practice and new audiences can be reached and engaged. A 2021 study conducted by On Think Tanks (OTT) and Impacto Consulting, supported by FinDev Canada and the International Development Research Centre (IDRC), concluded that think tanks perform several activities that reinforce and strengthen the efforts of impact investment market builders.

These include:

An IDRC-funded project, “Tapping into Local Research Expertise to Deepen Evidence-Based Impact Investing,” launched at the end of 2021, brought together GSG Impact, On Think Tanks (OTT), Impacto Consulting (Impacto), and NPs from Ghana, Colombia, and Nigeria to generate context specific research and identify the role of data and research partnerships in growing the impact investing market. The project’s theory of change shows that by collaborating with local researchers, NPs gain the insights needed to influence investor behaviour and affect policy change.