Air pollution is rising in Vietnam at an alarming rate, threatening both the national economy and people’s health. In 2017, alone, 71,365 Vietnamese people died prematurely due to pollution-related causes, including 50,232 deaths from air pollution, according to a report by Global Alliance on Health and Pollution. A news report citing research by Vietnam’s own National Economy University in 2018 estimated that Vietnam suffers an estimated $10.8 to $13.2 billion in economic losses due to ambient air pollution yearly, equivalent to 5% of our GDP. In addition, the 2020 Environmental Performance Index highlighted that Vietnam lags behind its neighbors on air quality, placing 13th in the Asia-Pacific region (out of 25 countries) and 115th (out of 180 countries) globally.

Hanoi, and Ho Chi Minh City ─ commonly known as Saigon ─ are both regularly listed among cities with the world’s worst air pollution, with air quality indices hovering at “unhealthy” or even “hazardous” levels. Industrial emissions, coal and waste combustion and the steadily increasing number of vehicles are among the main causes of air pollution countrywide.

Winrock works closely with local partners in Vietnam through the USAID Reducing Pollution project to address multiple sources of air pollution, including pollution resulting from transportation, from open burning of household wastes and agricultural by-products, and emissions from craft village production. The project also supports Vietnam’s government with ongoing environmental information and data disclosure and in developing national regulations to improve air quality.

​​By applying a successful collective impact approach and locally-developed solutions and resources, Winrock and partners are collaborating on a wide range of activities to improve air quality in Vietnam. Here are five initiatives that are already helping to move the dial toward safer, cleaner air:

1. Reducing air pollution from open burning

Open burning of household waste, straw and other agricultural by-products in suburban areas is common in Vietnam; it’s also a major source of air pollution.

To address this longstanding issue and reduce negative impacts on both ecosystems and public health, Winrock works with three strong Vietnamese partners: 1) the Center for Environment and Community Development; 2) the Center for Capacity Development of Humanities Community (Nhan Van); and D&L Technology Integration and Consulting Joint Stock Company.

Working together, this coalition is assessing large-scale air pollution distribution in Vietnam, with the goal of identifying air pollution hotspots. Drawing on the results of this assessment, the project and partners are co-developing integrated multi-sector solutions, applying available alternative technologies (focused on hotspots) to treat agricultural waste and by-products and reduce uncontrolled, open burning. This first-of-its kind initiative is also measuring the impact of air pollution on community’s health and supporting the development of a new air quality management policy to reduce the risk of air pollution on public health.

2. Reducing environmental pollution at metal processing and recycling villages

Binh Yen village in Nam Dinh province is located near Vietnam’s world-famous Red River. There, families from 170 households work intensively in the aluminum recycling industry, processing an impressive 400 tons of waste each month.

However, the most popular method of metal recycling in the village is smelting and condensing ─ a process that relies on the use of outdated and highly inefficient furnaces. Alarmingly, the smoke and other emissions generated by these furnaces is literally life-threatening to villagers and others who live in surrounding areas.

The USAID Reducing Pollution project is working with key partners on a long-needed plan to clean up the industry, starting with air pollution. By introducing and applying appropriate technologies, new/best environmental practices and with policy support, the project and partners including the Institute for Environment and Sustainable Development and Bach Khoa Green Technology and Environment Company Limited are establishing and piloting a production process improvement model. Targeted, appropriate technologies and BEPs are now being introduced in local manufacturing establishments and households in the village. Drawing on the pilot’s results, the technologies and practices will serve as a model for sharing with other manufacturing establishments and households, both in Binh Yeh and across other craft villages in the northern region of Vietnam. The initiative will support development of additional environmental protection measures for manufacturing establishments and households, as well as an environmental protection plan for metal processing and recycling craft villages. Taken together, these actions will transform and promote the development of new, sustainability-focused craft villages in Vietnam.

3. Researching automobile emissions and developing a roadmap for nationwide regulations

Recently, the number of automobiles in Vietnam has increased rapidly, mirroring the expansion of an economy that some reports cite as among the fastest-growing in the world. According to the Vietnam Ministry of Transport, in 2022 Vietnam had nearly 5 million registered cars; the government reports emissions from both motorbikes and cars as accounting for around 70% of the air pollution sources.

Currently, Vietnam’s Ministry of Natural Resources and Environment is developing draft legislation to regulate emission levels of automobiles, expected to take effect by late 2023. MONRE is responsible for creating a roadmap to enact the new regulations, which require automobiles in circulation to meet new, stricter emissions standards.

To assist with the process, USAID Reducing Pollution is supporting the government, working with two critical local partners: the Institute of Technology Development and BKGreenTech. Together, we are conducting research to assess application of current regulations on automobile emission levels both in other countries and in Vietnam, where we are analyzing existing automobile emissions data. This analysis includes conducting emission testing and collecting data on 1,000 automobiles in circulation in Hanoi and Ho Chi Minh cities. Based on the research results, ITD and BKGreenTech will help develop the roadmap for application of new National Technical Regulations on auto emissions, for submission by MONRE to the prime minister.

4. Supporting the creation of new regulations on management of air quality

In Vietnam, lack of coordination and cooperation among and between government agencies and local communities in different regions has slowed the overall response to the country’s urgent air pollution problems – including some of Vietnam’s worst pollution incidents.

To solve this issue, MONRE’s Pollution Control Department in 2023 began developing a set of new regulations for “coordination and measures to manage inter-regional and inter-provincial air quality management.” Between now and 2024, the PCD is focused on developing formal mechanisms for improved cooperation for economic zones both in the north (in seven different provinces) and in the south (covering eight additional provinces). These new regulations will create a critical foundation to enable local stakeholders to develop their own plans, mobilize resources and strengthen regional capacity to respond to air pollution incidents.

Additionally, the project is supporting the PCD to develop specific guidance around emergency measures for the most serious air pollution events, covering both the central provinces and cities in Vietnam. These guidelines will provide information on current preparedness levels and relevant measurements to reduce air pollution incidents based on national and international experience.

5. Developing and operating the Transparent Environmental Data Disclosure Platform

Emissions from industrial parks are a main contributor to air pollution in Vietnam. Currently, Vietnam’s 2020 Law on Environmental Protection requires such parks ─ and producers located inside them ─ to provide environmental data on air emissions to local authorities. However, because this information is often not fully digitalized and disclosures and data are often not shared publicly, it is challenging for authorities and communities to properly monitor environmental pollution levels. 

Via the USAID Reducing Pollution Project, Winrock is supporting the IDH – Sustainable Trade Initiative and Nothern Center for Environmental Monitoring to work with Provincial Departments of Environment and Natural Resources and key private sector partners on development of a new, transparent Environmental Data Disclosure Platform. This platform will encourage businesses to publicize their environmental information and allow local governments and communities to directly monitor point sources of pollution in their own geographies. The TEDP will help to fill information gaps in Vietnam, starting with at least four industrial parks and 50 corporations to share data on air emissions and industrial wastewater discharges in real-time, before the system is launched nationwide.

Malaysia has come under global scrutiny in the 2023 Trafficking in Persons Report issued by the U.S. Department of State. The report identifies the country as a significant destination and transit point for human trafficking and exploitation in its major industries, even though Malaysia has demonstrated some progress over the past year, moving from Tier 3 to the Tier 2 Watchlist. Given the powerful impact of news media in shaping public opinion, journalists who actively report on human rights issues hold the power to instantly amplify awareness about human trafficking ─ and to help inspire transformative societal shifts. Combined with the efforts of frontline workers such as law enforcement, survivor services providers, human rights advocates and others, the media are essential to the fight against human trafficking and modern slavery. Together, their efforts help comprehensively address the complex, overlapping and deeply entrenched systems and forces that drive human trafficking and related exploitation in the region.  

That’s why the  USAID Asia Countering Trafficking in Persons project partnered with the Thomson Reuters Foundation to conduct  an online program aimed at helping both Malaysian journalists and civil society organization (CSO) representatives to better understand and provide more informed, survivor-sensitive coverage of human trafficking in the Southeast Asian country of over 34 million people. The dual-track training, Reporting and Communicating on Human Trafficking and Modern Slavery in Malaysia, focused on the importance of moving away from sensationalist coverage, diversifying information sources and cultivating trust-based relationships with subject matter experts ─ an area in which local CSOs excel. Collaborating closely with the media can help CSOs reach their goals, including heightened stakeholder and public awareness, expanding their influence and increasing their effectiveness in the fight against human trafficking. 

The dual-track approach

The USAID Asia CTIP/Thomson Reuters Foundation training, held from January-March 2023, involved eight journalists and 10 communicators, all of whom are CSO representatives and/or researchers. Each participated in a five-week course comprising one day of learning for each group and an additional shared session each week. This engagement helped to facilitate networking sessions that fostered connections between journalists and CSO representatives. The training approach for the reporting track is rooted in solutions-focused journalism, including how to help the public unpack the complexities of TIP while building on core journalism skills. Meanwhile, the strategic communication track focused on honing CSO members’ general communications and media skills. Each week, participants from both tracks met in joint sessions to discuss learning, share insights and ideas while forging valuable cross-sectoral links to support the fight against TIP in Malaysia. 

Solutions journalism as a connector

Journalists and civil society representatives alike said they viewed the dual-track approach as a promising method to bridge the gap between civil society groups aiming to convey their message and journalists seeking to enhance their expertise and report more proficiently on human trafficking and modern slavery. This indicates the value of training and other participatory programs that engage journalists ─ including editors ─ to develop solutions-focused stories about modern slavery and human trafficking, and to integrate the approach into reporting strategies. These and other insights, including the need for journalists to connect and communicate regularly with CSO representatives, shed light on current and future actions needed to expand socially impactful reporting on these issues in Malaysia. 

Regional approach for cross-border issue

During the recruitment process for the training, many journalists and CSOs, including those outside Malaysia, expressed strong interest in bolstering their knowledge on reporting and communications related to the training topics. In response, we expanded access to the communications track for CSO applicants from Cambodia, Indonesia, and the Philippines to join the course. These participants lent the program a broader regional perspective and enhanced the learning experience for both civil society members and journalists. It also helped to foster connections between people working in the countries of origin for migrants in Malaysia. This highlighted both the need for similar training opportunities for journalists and civil society in other countries within the region, as well as the benefits of a regional approach to learning, especially considering the cross-border and inter-regional nature of human trafficking and modern slavery in Asia. 

Mentoring and story development

Mentoring started immediately after the training with the selection of five journalists to receive one-on-one coaching to develop their human trafficking story ideas. The mentoring phase also included assistance to participants for publication of their pieces. These stories are expected to shed light on TIP issues and to promote socially impactful reporting on human trafficking in Malaysia. In addition, three CSO participants from organizations in Malaysia, Philippines, and Cambodia, respectively, developed strategic communication plans to raise public awareness and elevate survivors and CSO voices to influence change in their countries.  

(Above: photo from Malaysiamail.com stories by journalists who participated in the USAID Asia CTIP/TRF training activity.)

Following the training, a three-month, one-on-one mentoring program took place. As a result of their collaborative efforts, the five inspiring journalists recently published impactful stories. These stories delved into pressing issues, such as investigating overseas job scams that have affected over 1,000 Malaysian victims currently awaiting rescue abroad. Additionally, they examined the present conditions within the fishing industry and the communities impacted, striving to find viable solutions to combat forced and bonded labor. Through their collective reporting, these journalists are shedding light on the darkness of human trafficking, exposing perpetrators and advocating for justice. We invite you to click on the links below to read their stories:  

Individuals Who Rescue Victims of Job Scams Show How It is Being Done    By: Chong Siaw Chan    

 Young Blood Needed to Help Shape Fishing Industry’s Future    By: Soon Li Wei & Rohani Mohd Ibrahim    

 Incentives, Grants and the Way Forward to Attracting Youth into Fisheries  By: Soon Li Wei & Rohani Mohd Ibrahim   

Two of the new stories were published in Chinese, with both articles examining human trafficking in Malaysia; the second story focuses specifically on child trafficking: 

 人口贩运（五）| 营救 辅导 培训 融入社会 SUKA助受害者展开新生  By: Jia Hui Lee and Sharon Shee Min Foo   

人口贩运（六）| “过程绘画”能疗心 艺术治疗助走出阴影  By: Jia Hui Lee and Sharon Shee Min Foo   

Click here to read the full report on the USAID Asia CTIP/Thomson Reuters Foundation training.  

This blog was made possible through the generous support of the American people through the United States Agency for International Development (USAID). The contents do not necessarily reflect the views of USAID or the United States Government.

I want to share an update on some of the U.S. Department of Labor-funded MATE MASIE project’s inspiring successes as we work with communities, government and other important stakeholders in Ghana to better understand the complex drivers of child labor in the cocoa industry, and to develop solutions to prevent it.

It is important for all of us, and especially the communities most directly affected, to remember that millions of young people around the world continue to be denied a childhood, an education and opportunities to pursue a better future because of child labor.

The ILO defines child labor as any work that deprives children of their childhood, potential, and dignity, as well as work that is detrimental to physical and/or mental development. Poverty is the main cause of child labor. It prevents children from receiving the education they need to end the cycle of poverty in their families and communities and help children to reach their full potential. After a couple of decades of progress reducing the number of child laborers, the ILO reports that numbers are once again on the rise.

In Ghana, we localized the theme for World Day Against Child Labor this year to: “Intensify Action Against Child Labor, Do It Now! Do it Fast!” because we recognize the urgency of raising more awareness of the problem, intensifying action and combining all available resources. The clock is ticking to meet the world’s 2025 deadline to end child labor in all its forms, one of the UN’s Sustainable Development Goals.

Here’s what we on the MATE MASIE project are working on. With our partners, we’re continuing our campaign to raise awareness on child labor, sensitize the public in Ghana to the problem, and engage law enforcement in discussions on improved institutional coordination to strengthen capacity to enforce both international and national child labor policy and law. We’re holding community activities including quiz contests, durbars (meetings with traditional leaders), and radio discussions to raise awareness on child labor in target communities and districts in the Ashanti Region.

We believe that amplifying messaging about the problem ─ and how we all can play a role in ending it ─ will motivate increased action, including expanded reporting on child labor in affected communities.

MATE MASIE is an expression in Ghana that means “What I hear, I keep.” In our project, we’re developing new ways to share detailed information so communities and government are hearing ─ and listening to each other and finding solutions, together. We’re collaborating with local cocoa cooperatives and officials on a new Child Labor Monitoring and Remediation System, which is helping to collect and disseminate data on children either engaged in or at risk of becoming involved in child labor. The system is now being used, along with a new Child Labor Risk Management tool, by the cocoa cooperatives that are partnering with our project. It’s already supporting the identification of vulnerable member households and children, and being used to deliver social protection services.

Our children will inherit our world. Let us pause, reflect, and prove our commitment to work together to cure the child labor canker, everywhere.

Funding is provided by the United States Department of Labor under cooperative agreement number IL-35537-20-75-K. One hundred percent of the total costs of the project are financed with USG federal funds for a total of $4,000,000 dollars. This material does not necessarily reflect the views or policies of the United States Department of Labor, nor does mention of trade names, commercial products, or organizations imply endorsement by the United States Government.

Refrigerants are the chemicals used in our air conditioning and refrigeration systems to keep people, food and medicine cool. In an increasingly warming world, they are being utilized more and more to help people adapt to rising temperatures.

Unfortunately, the most common chemical compounds we use as refrigerants, such as hydrofluorocarbons (HFCs), are extremely potent greenhouse gases (GHGs); many trap thousands of times more heat in the atmosphere than CO2 over a 100-year period. We also still face a serious legacy issue around older refrigerants like HCFCs and CFCs, which are also ozone depleting substances (ODS).

All told, these climate-warming refrigerants slowly leak into the atmosphere throughout production, use and disposal. Worse still, sometimes they are deliberately vented during servicing or disposal of equipment, although certain countries ban this practice. As equipment reaches end of life, there is dwindling use for the remaining refrigerants. Because destruction of the refrigerants is not mandated, unused supplies can be stockpiled for long periods, over which time the pollutants leak into the atmosphere.

It is estimated that across the U.S. the installed base of these super pollutants is equivalent to 3.6 billion metrics tons of CO2e emissions. Globally, it’s 24 billion metrics tons of CO2e. With increasing demand for air conditioners and refrigeration units, they could account for roughly 20% of global climate emissions by 2050. 

What’s being done about refrigerant climate pollution?

Under the Montreal Protocol, the production and consumption of CFCs has been phased out by all nations and HCFCs have been phased out by most developed nations. And a global phasedown of HFCs has recently begun under the Kigali Amendment to the Protocol. Its ratification by the United States will certainly have a significant impact on curbing the impact of these refrigerants on global warming. By reducing HFC emissions, it is estimated that up to 0.5°C of global warming could be avoided by 2100.

However, there’s much more that can be done. When it comes to ODS, many continue to be legally reclaimed and recycled for use in older equipment that is prone to more leaks. The Montreal Protocol also doesn’t address the millions of HFC units already being used and sold in today’s market. For example, by 2050, the current HFC phase down schedule will have allowed 3.6 billion CO2-equivalent metric tons to be sold into the U.S. market, effectively doubling the potential climate harm these super pollutants can cause in the coming decades.

What can be done to take refrigerants out of circulation today?

The Natural Resources Defense Council (NRDC) has proposed a range of commonsense actions to improve lifecycle refrigerant management. Outlined in their 90 Billion Ton Opportunity Report, these actions focus on avoiding and reducing refrigerant leaks, promoting refrigerant recovery, and increasing reclamation rates to mitigate unnecessary refrigerant use and emissions.

These are all no-regrets, high-impact solutions that warrant immediate support, both in terms of regulation and voluntary action. However, in the absence of additional regulation, it all comes down to incentives. And the report overlooks a key ingredient that can help provide those incentives: carbon finance.

Simply put, carbon markets can be a powerful tool to catalyze and accelerate adoption of the actions recommended in the report. ACR’s ODS destruction, HFC reclamation, Advanced Foam Blowing Agent and Advanced Refrigeration System methodologies, for example, are already incentivizing and encouraging many of these actions.

What does this look like in practice? Take for example a joint initiative between Therm and the North American Sustainable Refrigeration Council (NASRC). Under this initiative, financing from the sale of carbon credits, using ACR’s Advanced Refrigeration Systems (ARS) methodology, is allowing mid-sized grocery retailers and foodservice providers to make the switch to more sustainable low-GWP refrigerant compounds cheaper, and therefore faster, than without the carbon market.

Destruction of ODS and HFC refrigerants is costly. Without revenue from the sale of carbon credits, there would be no sustainable source to finance destruction. This would lead to more stockpiling and eventual leakage of these high-GWP climate pollutants in the atmosphere. 

Another example comes from the California Air Resources Board’s (CARB) Refrigerant Management Program. This program requires companies to track and report their refrigerant emissions and incentivizes the use of more sustainable refrigerants through a credit trading system. Since its implementation in 2011, the program has helped reduce refrigerant emissions in California by more than 30%.

What can be done to grow the carbon market supply and demand for refrigerant credits?

Currently the carbon market for refrigerants faces several solvable challenges. These include inadequate capacity of infrastructure and associated trained workforce to help reclaim and destroy high-GWP pollutants. There are high capital costs to build the facilities and the train staff necessary to undertake this technical work. Additionally, there is a lack of awareness among buyers of carbon credits that these types of projects exist. To be frank, many buyers, when they think of carbon markets, think about renewable energy or forestry projects.

Carbon credits generated from the management of high-GWP refrigerants are of high quality because they are proven to be highly additional and permanent. These high-quality credits demand higher carbon prices to motivate maximum action from manufacturers and companies involved in servicing, reclaiming, and destroying these refrigerants. With many high-GWP refrigerants also being short-lived climate pollutants (SLCPs), paying higher prices for refrigerant carbon credits, is also justified by their higher contribution to reducing GHG emissions (and hence global warming) in the near term (by mid-century) which aligns with most net-zero targets. Higher carbon prices for high-quality refrigerant carbon credits would help significantly lower GHG emissions and provide the volume of credits needed by buyers to offset emissions to meet mid-century net zero targets.

High-GWP refrigerants should be replaced with low-GWP alternatives, recycled and reclaimed for reuse, or destroyed. No high-GWP refrigerant should be allowed to leak into the atmosphere due to lack of incentive to do so. This would be too costly for the planet. At the moment, the rates at which high-GWP refrigerants are being replaced with lower GWP alternatives in most end-uses like supermarkets and grocery stores, and HVACs, reclamation of used High-GWP refrigerants, and destruction of High-GWP refrigerants are all very low. Buyers of carbon credits need to realize this massive climate problem associated with the continued use and leak of High-GWP refrigerants. The carbon market can provide the much-needed incentive to motivate action to lower use and leak of these super pollutants. At adequate carbon prices, emissions reduced from increased refrigerant management can be a significant source of high quality, highly additional and permanent carbon credits that can help buyers meet their net zero and other climate targets by the midcentury.

With carbon markets expected to grow significantly, there are positive signs that these challenges can be overcome. Higher demand and prices for carbon credits will increase the attractiveness of financing the recovery, reclamation and destruction of high-GWP refrigerants. It would benefit stakeholders in the carbon market space and those who care about the climate impact of refrigerant compounds to look more closely at how carbon markets can be an effective tool to motivate action.

As a mission-driven organization focused on sustainable international and domestic development, Winrock International recognizes the massive amount of work that lies ahead to fill the estimated investment gap between where the world is, today, and the amount of money needed in order to hit the goals set in the 2030 Agenda for Sustainable Development. I’ve written previously about the specific challenges in climate financing and will come back to that theme in the examples below.

To begin filling that overall development financing gap, one global organization that crunched the numbers has calculated that we’ll need to invest an estimated $4.2 trillion per year, an amount exacerbated by COVID and its related (and continuing) economic fallout. It’s an enormous figure – but with commitment and a mix of smart financial strategies, we can get there. Impact investing is one class of investments that is uniquely positioned to meet the development financing challenges ahead.

Impact investments are designed to generate positive and measurable social and environmental impacts alongside financial returns. According to the Global Impact Investing Network (GIIN) ─ a respected international think tank that seeks to accelerate development through focused leadership and collective action ─ the total size of the global impact investing market was around $1.2 trillion in 2021, an astonishing 60% increase compared to 2020.

While this uptick is a very positive indicator of impact investing’s huge potential to close the development finance gap, it also brings growing pains. One such issue is the perceived ─ and, in many cases, real ─ lack of transparency and integrity in the way impact outcomes are measured and managed. “Impact washing” is a term now used widely to describe rising concerns stakeholders have about the veracity of impact claims. These concerns can dampen investor enthusiasm, provide fodder for those seeking to prolong the status quo, and muddy the waters even for those who are truly committed to putting in the work – and the capital – needed to achieve real progress toward our Sustainable Development Goals.

To make the impact investing landscape more transparent for all and to facilitate additional financing, Winrock works with a wide range of stakeholders and peers both up and down the value chain of impact investing (from the communities and local partners who need investment all the way up the chain to the investors) and across the transaction life cycle from concept development to post-investment monitoring. The goal is to help the impact investing sector to reach its true potential. Here are two specific ways Winrock is doing that, both of which strengthen financing for climate-focused action.

Developing new tools and intel to boost climate investment in partnership with GIIN

The GIIN, as part of its role in championing the impact investment sector, provides a free, publicly available resource called IRIS+ that makes it easier for investors to translate their impact intentions into impact results. IRIS+ does this by increasing data clarity and comparability, and it provides streamlined, practical, how-to guidance that impact investors need, all in one easy-to-navigate system. Since its launch, the IRIS+ framework has published 16 strategic goals for investors seeking to finance sectors including water, energy, health and others. Winrock, in fact, is honored to partner with GIIN to develop content for a new strategic goal: climate adaptation and resilience (CAR). This goal will support investments and investors in channeling increased resources to achieve these climate-focused outcomes. Considering that the total global investment needed for climate adaptation is around $240 billion per year by 2030, and the climate knock-on effects of adaptation investments (or lack thereof) on other SDGs, this strategic goal is of utmost importance to the impact investing sector.

Winrock’s exciting new partnership with GIIN kicked off in January at a launch event that involved nearly 30 stakeholders from across the impact investing sector. We look forward to working with this high caliber group as we develop further content for the IRIS+ framework related to the CAR theme. When the final text for the CAR strategic goal is published on IRIS+ ─ expected in June 2023 – it will become a new and leading source of information, tools and intelligence for the global impact investing community, and for other investors exploring investments to create real and positive climate adaptation and climate resilience impact.

Helping investors analyze potential climate-related benefits and risks

Moving over to another part of the value chain of impact investing, Winrock also works directly with impact investors to design, share and implement bespoke tools that leverage global best practices and cutting-edge science. To provide just one example, Winrock is currently partnering with the Acumen Resilient Agriculture Fund, a $58 million impact fund and the world’s first equity fund designed to build the climate resilience of smallholder farmers. ARAF supports smallholder farmers in Africa by investing in early and early-growth stage agribusinesses that enable them to anticipate, weather, and bounce back from climate events, resulting in increased yields and incomes.

Given the impact intentionality of ARAF, Winrock recognized the importance to the fund’s sponsors and investors ─ which include the likes of The Green Climate Fund, The Ikea Foundation and others ─ of ensuring that climate resilience elements are incorporated in the due diligence process for targeted investments. To achieve this, Winrock designed a tool called WinRes that complements ARAF’s wider set of due diligence activities, to build understanding of exposure to climate risks, resulting climate resilience benefits, and any unintended maladaptation that could result from targeted investments.

Winrock is building on this experience to create WinRes 2.0, currently in development, for impact investors that in addition to strengthening pre-investment processes, will also help in unlocking value post-investment in two ways. First, it will facilitate alignment of products and service offerings of portfolio companies to align with climate resilient net-zero pathways. Secondly, it will articulate the climate benefit both at the impact fund level and at the investee-level, to unlock higher valuations or achieve a lower cost of capital.

Those are just two examples on the climate front of Winrock work that support accelerated and expanded impact investment.

Beyond our own contributions, we are keenly watching several developments that could further strengthen the impact investing sector’s ability to effect change on the ground across development sectors. One is implementation of the Sustainable Finance Disclosure Regulation in the European Union, which among other things, standardizes the disclosure and transparency requirements for financial market participants and financial advisors that structure, market and manage sustainable finance products. While the immediate fallout of the introduction of such regulation in 2022 was the “sustainability downgrading” of a few self-proclaimed impact funds, in the long-term the impact investing and sustainable finance marketplace should be strengthened and inspire more confidence amongst all stakeholders.

Another is the integration of nature with finance – both in the form of natural capital emerging as an asset class in itself, and through the internationalization of an investment’s impact on nature and vice versa in global financial systems. The latter part is significant because even though our real economic systems are physically intertwined with nature (i.e., the World Economic Forum estimates that over half of global GDP is moderately or highly dependent on nature), our financial systems neither recognize nor value this linkage, which makes it difficult for natural capital investing to gain a foothold. The emergence of a variety of tools and disclosure frameworks, like the Taskforce on Nature-related Financial Disclosures, arm impact investors with the capabilities needed to ensure that not only are they avoiding doing harm to our natural capital, but that they design investment vehicles that improve our natural capital in a measurable, methodical manner.

Making money while doing good is never going to be as easy as doing just one or the other. But for those who are willing to put in the hard work and stick to the principles of impact investing, the world is becoming a better place for them to make the world a better place.

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