Development Financial Institutions: Impact Investing Practices in Scandinavian Context

Abstract

Socially responsible Investing (Impact Investing, Sustainable, Ethical, Green investing) that offers pragmatic and social outcome deliveries have become rapidly adopted financial innovations in Scandinavian countries. Impact investing is considered to be one form of a socially responsible investment strategy in the global arena which considers both financial return and social impact (best intentions, outcomes). This research will evaluate Social Impact Investing (SII) practices with particular attention to the private equity companies NORFUND, which is owned by the Norwegian Ministry of Foreign Affairs. Each of three independent case studies is examined in a comparative analysis based on the following criteria: 1) Economic conditions, 2) investment environment, 3) ease of doing business, 4) performance of the Norwegian Development Cooperation, 5) relevance, 6) constraints, and 7) opportunities. Results of the analysis show that success or failure of a given venture is tightly coupled to the political environment and existing infrastructure, both financial and real (roads, power distribution, etc. . . . ). Suggested improvements based on the analysis include a focus on improving several existing programs.