Beyond Compliance: Embedding Impact through Innovative Finance25Partnering with existing projects A simple way to start the OBF journey is by partnering with experienced organizations and participating in existing projects that are already structured around specific outcomes. This allows companies to learn how the OBF model works, without having to develop new systems. For example: –Corporate foundations can participate in the pipeline of existing outcome-based partnerships, outcomes funds or impact-linked finance transactions. –Multinational companies can partner with DFI-led initiatives in the countries in which they are operating. –Learning can be expedited by joining market- building initiatives such as the Outcomes Finance Alliance or the Impact-Linked Finance Collaborative. Integrating innovative finance within existing functions and instruments Companies do not need to build entirely new teams or practices to explore OBF. In fact, many companies already have the infrastructure in place to start experimenting with OBF through their sustainability, finance, CSR or supply chain teams. Many of the relevant core competencies to design and implement these initiatives already exist, including sophisticated measurement frameworks, performance-based incentive structures, and the ability to manage complex cross border operations. Building on these standards, companies can leverage innovative finance approaches to add monetary value to sustainability and social indicators, align incentives with partners, and ensure that outcomes are verifiable. Furthermore, companies can begin to apply OBF tools within specific functions by using well- established instruments and adhering to established guidelines and principles.56, 57 For example: –Companies can adopt simple pre-tested mechanisms like SPCs and SIINCs to support supply chain companies and social enterprises. –Companies can add social outcome metrics to sustainability-linked loans or bonds that are aligned with their strategic impact goals. –Corporate foundations can pilot transactions with a view to a broader application to company supply chains. Photo credit: Financing Alliance for Health

Beyond Compliance 2024