Beyond Compliance 2024

Beyond Compliance: Embedding Impact through Innovative Finance27Application of OBF to corporate-specific uses cases TABLE 2 Hypothetical use case examplesHow OBFs can address the challengesRecommended OBF tool Pilot to scale process Compliance and risk management: comply with new regulations focusing on human rights in supply chains (e.g. CS3D)Enable companies to exceed standard ESG risk management and reporting in operations and supply chains by providing verifiable and auditable outcomes –SPC –SIINCs –Outcomes-based smart subsidy model –Test in regional supply chains then scale to global supply chains –Stakeholder engagement: supply chain department, CSR, compliance Product and services opportunities: strengthen revenue streams in new and emerging markets or client segmentsCreate a strong link between products and services with social and environmental goals to amplify growth potential –Impact bond –SLL –ILF –Challenge Fund –Identify revenue streams that align with impact-linked incentives and develop pilot –Scale OBF across core revenue streams to unlock greater value –Stakeholder engagement: corporate foundation, CSR business development, finance, treasury Financial performance: Raise lower cost of capital to support business needsPotential for reducing cost of capital by aligning financing needs with impact goals –ILL –SLL –SLB –Test pilot with projects or business needs that require financing at a smaller scale –Scale OBF model to address larger financing needs of the business. –Stakeholder engagement: finance, treasury, corporate development, corporate foundation and accounting Create inclusive and localized supply chainsProvide additional financial support to suppliers to meet sustainability and impact goals –SLL –SPC –SIINCs –Provide ILF/OBF to existing suppliers who have a strong impact/sustainability track record –Stakeholders: procurement, buying centres, CSR Skills development: Tackle skills gap at national market level in pre-competitive spaceWhere market failures exist in terms of scale or inclusivity in skills gaps, OBF can be applied to accelerate skills development –Impact bond –Outcomes fund –ILF –Test pilot with foundation or CSR –Scale according to the skills development needs of regional supply chains –Stakeholder engagement: HR, CSR, corporate foundation Innovative philanthropy: Align corporate philanthropy with strategic objectives to create greater valueEnhance corporate philanthropy and corporate goals by driving financial returns and impact outcomes –Impact bond –Outcomes fund –ILF –Impact credits –Test pilot with corporate foundation –Crowd in capital from commercial arms to scale OBF by adopting a portfolio approach and leveraging philanthropic capital to de-risk –Commit to fund specific outcomes at a fixed price that is contingent upon verification of results –Stakeholder engagement: corporate foundation, wealth management, asset management, finance, treasury More details about the different OBF mechanisms can be found in the Appendix and on this website.