What’s Impact Finance?

Impact finance is the funding of Sustainable Development Goals (SDG) to make an impact within the community where the development is taking place.   The impact development outcomes strived for are:
(1) social improvements in the welfare of the associated residents,
(2) environmental improvements aiming for a green circular economy, and
(3) economic feasibility of the project, jobs, income improvements and a healthy return on the capital employed to produce the project.

This is the triple bottom line everyone is talking about achieving.

All of this requires a fourth factor:
4) establishing an Enabling Environment with an ecosystem of support for entrepreneurial growth and economic expansion.

But first let’s talk about why Impact Finance is so important.

 

Freedom to choose one’s best options allows people to make the best choices.   Poverty on the other hand necessitates desperate measures in order to survive.  Freedom and Poverty are mutually exclusive.

To solve the problem, sustainable economic development growth is manifest and nurtured in a ecosystem inclusive of seven elements:
synergism pillar building, SDG enhancements, stakeholder engagement, an investment inclined culture, hub building, finance, and ecosystem support.

We call the process and work to create this system the Sovereign Eco-Development Ecosystem^®, an impact system for improving peoples lives intentionally.

Freedom via Impact Finance for
Sustainable Economic Development & Growth

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Why is intentional Eco development so important?

Intentional Economic Development (Intentional Eco-development) actually improves peoples lives.  It is defined as concentrated holistic development using an integrated approach to environment and social development which is sustainable within a specific region.   Sustainable means enduring.

Sustainable Impact Finance Earns Outcomes

Sustainable impact finance gets to the real bottom line.

Now we can get to the three outcomes we are in the process of manifesting.   Lets take one item at a time to discuss what the issues with each item are.

 

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Social Return On Investment

Social ROI starts with your Theory of Change

Ultimately, the goal is stimulating economic growth, meaningful employment, development, and prosperity by creating measurably more entrepreneurship in a given locale.

Our Theory of Change starts with our concept of creating an atmosphere where growth of the target community can take off on its own (thus sustainable).   So we are starting with the things that will make the biggest difference to everybody in the community.   That means we are starting with the Transference Synergism Pillars:

The Transference Synergism Pillars are those outset in the image below:

1 Finance – because everything starts with acquiring the money for our projects

2 Energy – Energy provides efficiency and productivity increases

3 Communication – It’s the backbone of commerce and due for improvement

4 Water – The area we are building is an ecologically sensitive area and water management is part of the infrastructure to preserve the environment.

5 Logistics – we need the roads, built on top of the underground infrastructure to get access to build.

Housing – Because Nigeria is a high population growth country – Real estate development is also one of the easiest to create entry level jobs.

These top five Transference Synergism Pillars are the starting point for every project we undertake.   We are developing development hubs so housing will usually be involved also.   You just can’t build businesses and expect them to operate without infrastructure.

We are engaged in an operative Environment and Social Management Plan (ESMP), which is the tool we use to perform project management, in order to ensure we are making headway on our social and environmental goals.

The Conception & Initiation Project Management (PM) phase is where the Sustainable Development Goal (SDG) initiatives are identified and where the Impact team registers and accounts for the associated indicators used to measure change.   These necessities are registered in each project charter, and the impact team must then devise the methodology to collect these sets of data.

 

 

So you might ask, How do the UN’s Sustainable Development Goals fit into this picture.

Just Focusing on sustainable Infrastructure, the image below illustrates how we touch on many of these SDGs.

 

“The SDGs drive long-term value by structuring investments to actively create long-term change in social, environmental, and economic systems.”

Sustainable Development Goals

Goal 1. End poverty in all its forms everywhere

Goal 2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture

Goal 3. Ensure healthy lives and promote well-being for all at all ages

Goal 4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

Goal 5. Achieve gender equality and empower all women and girls

Goal 6. Ensure availability and sustainable management of water and sanitation for all

Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all

Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

Goal 10. Reduce inequality within and among countries

Goal 11. Make cities and human settlements inclusive, safe, resilient and sustainable

Goal 12. Ensure sustainable consumption and production patterns

Goal 13. Take urgent action to combat climate change and its impacts

Goal 14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development

Goal 15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

Goal 17. Strengthen the means of implementation and revitalize the global partnership for sustainable development

 

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Environmental Responsibility & The Green Circular Economy

We are all becoming more conscious of being better stewards of this planet we reside on.   Being conservative when it come to the environment is increasingly more popular as we are seeing the outcomes from pouring pollutants into our rivers, streams, the ocean and the air.   Landfills are emitting huge amounts on methane into the atmosphere, so much so that they often catch on fire.   Our company intends on leading the way by financing green and circular initiatives.

It is increasingly advantageous to redeploy resources over and over, often for the same or comparable purposes.   This is the organizing principle of circular economies, and the benefits that come from following it can be substantial.

These objectives are the following we are aiming at:

i. climate change mitigation;
ii. climate change adaptation;
iii. sustainable use and protection of water and marine resources;
iv. transition to a circular economy, waste prevention and recycling;
v. pollution prevention and control;
vi. protection of healthy ecosystems.

If a project we are doing does not involve one of these objectives directly we will add in a side project in order to accomplish these three SD goals.

Here are some examples of project types we are including in our finance plan:

• renewable energy (including production, transmission, appliances and products);
• energy efficiency (such as in new and refurbished buildings, energy storage, district heating, smart grids, appliances and products);
• pollution prevention and control (including reduction of air emissions, greenhouse gas control, soil remediation, waste prevention, waste reduction, waste recycling and energy/emission-efficient waste to energy);
• environmentally sustainable management of living natural resources and land use (including environmentally sustainable agriculture; environmentally sustainable animal husbandry; climate smart farm inputs such as biological crop protection or drip-irrigation; environmentally sustainable fishery and aquaculture; environmentally-sustainable forestry, including afforestation or reforestation, and preservation or restoration of natural landscapes);
• terrestrial and aquatic biodiversity conservation (including the protection of coastal, marine and watershed environments);
• clean transportation (such as electric, hybrid, public, rail, non-motorized, multi-modal transportation, infrastructure for clean energy vehicles and reduction of harmful emissions);
• sustainable water and wastewater management (including sustainable infrastructure for clean and/or drinking water, wastewater treatment, sustainable urban drainage systems and river training and other forms of flooding mitigation);
• climate change adaptation (including information support systems, such as climate observation and early warning systems);
• Eco-efficient and/or circular economy adapted products, production technologies and processes (such as development and introduction of environmentally sustainable products, with an eco-label or environmental certification, resource-efficient packaging and distribution);
• green buildings which meet regional, national or internationally recognized standards or certifications.

 

Below is an illustration of what a Green Circular Economy could look like:

 

 

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Economic Feasibility & Profitability

Selection of projects must first meet economic feasibility standards.   Each project shall have an economic feasibility study made.

The objective of each project is to create a revenue generating machine that has a gradually growing continuity income and net revenue sufficient to support the financial vehicle utilized.

Projects are municipal size projects that empower the community with increased efficiency and increased productivity which is the catalyst for long term economic growth.

Projects are grouped in a regional hub so that when combined they provide a synergistic growth ecosystem where project-independent spillover economic activity occurs.   Projects are also grouped in geographic proximity so that eco-industrial efficiencies and circular waste-to-resource efficiencies reduce over-all operating costs of the associated companies.

Project CAPEX is financed in such a way that long term operating efficiencies are favored over short term immediate revenues.   This is accomplished by our “First Grow Capital” Principle, where our derivatives trading department grows seed capital significantly resulting in multiples of the seed capital for CAPEX and investor ROI.

 

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Impact Vision Manifested

First, we have to realize that nobody has the capital to change an entire country at the same time.   It is not a good idea to do so anyway.   In any business you want to learn from the work you do and make adjustments as you go along to institute new best practices when you find things that are not working the way you planned and hoped they would.

That is why our system is regional specific.   This allows you to contain the ineffective use of capital.   Building eco-development hubs makes the most sense because you are focusing your activity in a community where you can get input from those that live there.   You need their input because you do not really know where the disparities are until you communicate with those that are going to be effected.

Once you have determined what the locals know to be their difficulties then you can plan your intended SDG enhancements around your work plan.   Our work plan was to first deal with one of the four essential synergism pillars which most impeded growth when it was missing, that of energy supply.   So we needed to build the base energy and then plan on supplementing it with renewable’s of solar, wind, biogas or waste generated energy and energy storage systems.   No down time was allowed.

We then combined this input with either or both agricultural development in the region or mining in the region, if it was available.   So those were our anchor industrial tenants.   This is where long term jobs would start, after the construction was complete.   The construction would be the other primary source of low skilled labor that was available in the area.  We could bring in our engineers and team management from other areas.

We would then integrate into the mix the SDG enhancements and try to get as many of them moved to the front of the project so that the community would see that we listened and put their recommendations to work immediately.  Everybody needs to be heard and then respected by action.

We built modern infrastructure for the communities, including communication infrastructure, the new housing and all the buildings to house the new industry, service and retail and storage that was needed in the community.  Our real estate management company took it from there and leased or sold space to those that were coming into the community for jobs and improved housing.

We first planned the major infrastructure industrial inputs and these, once completed, worked together synergistically to enhance the life condition of the people involved.  When the major infrastructure projects were combined with the voids in sustainable development goals that were missing in the community, then we were able to attack the chronic disparities and make immediate improvements while the bigger projects were still ongoing.  These voids usually involved potable water supply, health remediation and a foundational source for ongoing gender issue solutions.  Our industries then provided the trade education to get people job ready for what we were building.

For agriculture we already knew what the issues were and so we built in irrigation systems, provided credit systems to supply feed stock inputs into that region and then set up systems to off-take the post harvest production.   We needed to eliminate the post harvest loss so we built storage systems and marketing systems and from these we could recover the costs of pre-harvest inputs through our commodity intake process and sales output processes.

We have technology enhancements that not only reduce the necessary inputs but at the same time drastically improve yields in agricultural production.   We then also built our own large scale mechanized farms and planned those harvested goods to be exported or processed locally and then supplied to make food products or industrial feed stock products.   This infrastructure, systems and tools gave us both the upstream and downstream needs that were missing in the region.

If there was available mining resources then we built the extraction and processing industries for those products also.   We wanted to add value locally so that the majority of the capital flow stayed within the community and didn’t end up in a foreign country.

In the end, we had built a completely sustainable and self sustaining community, because the people there had the talents and skills to do the day to day tasks.   Then there was an influx of activity as people from around the region moved in to take advantage of the better infrastructure, housing and jobs available and then others brought in their own skills and talents to add to the community.

This is how intentional eco-development is done where it positively affects entire communities.   What we learned from building the first community we could then utilize when building the next communities.   Gradually we could intentionally improve the entire economic condition in any region we wanted to make a difference.

Sustainable economic development is no longer haphazard, it was now intentional.

We have but one cause in this trial of our heart,
to make life better for our brothers and sisters.

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Just because there is development going on does not mean that there is also social outcomes or environmental considerations that are being met also.  Sovereign Trusteeship has this concern at the top of their agenda.  Our Impact M & E company is a subsidiary that was formed to consult and ensure that all of the needs of the real beneficiaries, those that live in the new communities are met.

 

Message from Sovereign Investment Trusteeship Founders