Imagine if a symphony was our inspiration
Offered by B For Good Leaders Steward Herman Mulder in his function as Chair of SDG The Netherlands.
Our mission: Broad Prosperity based on the SDGs
We want to be a society characterized by broad prosperity and sustainable development. Based on concrete, medium-term policy objectives and investment needs, outcome-based blended finance is an extremely important enabling factor. This approach aims to create effective synergy between government, entrepreneurs, civil society organizations and the broad private financial sector, with the overarching mission to promote the well-being of society.
With a courageous conductor
In this society, a stimulating government acts as an orchestra conductor for the coherent, budget-efficient and results-effective use of its limited resources relative to the various major societal challenges.Traditional approaches are not sufficient, coherent, efficient or effective enough to tackle complex problems such as poverty, inequality, climate, environmental pollution and, in a broader sense, sustainable earning capacity of and for us all. This requires both innovative solutions and more widely applied, already known solutions, in order to maximize the effect of public investments for the common good
With an inspiring, inclusive music score
Outcome-based blended finance is the answer to this. This approach offers a unique combination of public and private capital to finance initiatives and projects aligned with the Sustainable Development Goals (SDGs). It expects the government to mobilize private capital by providing targeted, complementary instruments that act as positive incentives, increasing the desired effect through private investments by a factor of five compared to public capital. These instruments (such as partial risk guarantees/insurance, conditioned impact bonds, etc) are not subsidies as a fee needs to be paid (similar to official export credit insurance schemes). The potential to increase public capital by a factor of five through private financing is a game-changer in financing ambitious projects and accelerating progress towards the broad prosperity mission and the realization of the SDGs.
For an engaged audience
This approach not only offers advantages for a perspective that meets the wishes of society, but also fits in with responsible government policy. People and companies are no longer solely focused on financial returns; There is undeniably a broad desire in our private sector for outcomes that also contribute to the sustainable, overall well-being of people and nature: the stakeholder approach. Outcome-based blended finance also brings the interests of the private financial sector in a positive motion (instead of the defensive/ESG play) and much more in line with the general, future interests of society. It offers opportunities to create joint momentum “for much better for everyone”, to allocate risks and returns proportionally to stakeholders, and to make results-oriented investments that are both financially rewarding and socially impactful. By investing in solution-projects aimed at addressing societal challenges, the private financial sector can implement responsible and results-oriented investments, with positive outcomes for everyone.
With full orchestra
The involvement of all stakeholders is crucial for the success of this approach. The pension sector, as an important long-term player in the financial landscape, can play an essential role in this. In view of their “double fiduciary duty of care”, this sector could invest 25% of its managed assets directly in the (Dutch) future agenda. A commitment to this end, based on a new generation of (cost-covering) government instruments, fits in perfectly with its responsibility to maximize financial returns for their participants, while also taking into account broader societal priorities. By contributing to solutions in the often regional portfolios in the real economy, the pension sector can make a major contribution to social and economic stability for its current and future participants.
With a clear music score
With outcome-based blended finance and the active involvement of the entire financial sector (institutional investors, insurers, banks, private equity, philanthropists, etc.), ambitious (small and large, national and regional, thematic) initiatives, enterprises and projects aimed at promoting inclusive growth (within planetary boundaries), nature restoration, less pollution and reducing inequality, receiving significant funding. Communities are given the tools to strengthen themselves because the outcomes of these projects directly impact their lives and environments. People can see tangible results, leading to greater trust in government and also the private financial sector.
In harmony between public and private sector
Remarkable progress can be achieved through joint efforts between government, the private financial sector and organized society. The Sustainable Development Goals are not just seen as aspirations, but as concrete goals that are being achieved. This has already been proven on a small scale. Society can move towards a future where prosperity is not only measured by financial wealth, but also by the well-being of its citizens and by a sustainable approach to nature and the environment
The Promise of Symphony
Outcome-based blended finance, supported by the complementary, de-risking and/or return-improving characteristics to promote sustainable development. By mobilizing private capital, aligning the interests of the private financial sector with social good and the active involvement of the pension sector, this approach ensures efficient allocation of resources, risk mitigation and results-oriented investments. With this paradigm shift towards outcomes-based finance, society will experience positive change and progress towards a prosperous and sustainable future for all. While maintaining sensible government policy!
The road to the Symphony performance:
Essential preconditions for a performance of the Symphony are: (1) a courageous, inspiring government, as co-composer and conductor, with a broadly supported, coherent future perspective and plan (the score), (2) a proactive, creative, socially responsible private financial sector, as co-composer and supporting orchestra member, (3) a broadly developed ambitious mindset, knowledge, skills and capacity among entrepreneurs, knowledge institutions and the rest of society as a large orchestra, all aimed at a much better world” here, now, later, elsewhere” .
A Financing Agreement in 6 months is certainly possible: the concrete ideas are there!
Herman Mulder, Chair SDG Nederland
Dennis Kerkhoven, SDG#16 Coordinator
