Introduction Traditional approaches fail to fully address social and environmental issues – tradeable impact offers a bold alternative. Social issues are becoming increasingly diverse, complex and severe. The challenges the world faces today demand systemic change rather than incremental progress. Yet, the economic tools at the disposal of policy-makers and businesses remain limited. Recent geopolitical tensions have disrupted decades of progress in global development, and efforts to combat climate change and advance sustainable development are being neglected in favour of other pressing priorities. In this context, the limitations of traditional approaches have never been more evident. It is becoming increasingly necessary to explore new models that fundamentally change how humanity works, lives and grows together. This general rethinking will shape future institutions. So far, financial innovations have primarily focused on pricing negative externalities. For example, carbon credits aim to internalize previously overlooked environmental costs. Similar mechanisms are now being developed for biodiversity and plastic waste.1 These approaches, while necessary, have also resulted in increased production costs for companies and accelerated so-called “climate inflation”.2 These frameworks primarily function as cost adjustments rather than incentives for proactive, positive action. This paper presents a supplementary policy approach, which involves using positive incentives to encourage market actors to take meaningful action. Positive incentives represent an alternative to punitive measures in long-term behavioural change. Their application improves not only individuals’ ecological behaviour but also companies’ social performance.3 Rewarding social and environmental contributions (rather than implementing punitive measures) can open new avenues for economic growth, driving innovative business opportunities and enabling economic systems to prioritize prosperity, social progress and planetary health. Solving social issues is no longer solely the responsibility of governments. The key question is not “who” should address these challenges, but rather “how effectively”, “how efficiently” and “how equitably” they are addressed by a multiplicity of actors. While bold philanthropy remains vital to step-change and systemic solutions, business efficiency is growing increasingly necessary in the scale-up of solutions that have already proven viable. Businesses are, however, also navigating a backlash against diversity, equity and inclusion (DEI), environmental, social and governance (ESG) criteria and broader sustainability efforts. This trend marks a turning point, prompting companies to review social and environmental impact initiatives in light of their contributions to core business strategies. Simultaneously, the escalating climate crisis and growing social disruptions, driven by rising costs of living and job displacement caused by technological advancements, necessitate solutions that enhance corporate value chain resilience and secure long- term societal trust. In this era of rapid change, adaptation strategies and corporate contributions to social coherence are key to maintaining a business’s license to operate. Relying solely on goodwill to create social value has clear limitations. At the same time, there’s growing evidence showing that positive social and environmental impact improves a company’s business success. However, since social impact does not directly generate returns comparable to economic gains, market participants prioritize financial incentives. This paper explores how standardization, securitization and eventual trade of verified social or environmental impact could create novel economic value and incentives. In an era of slowing and sometimes negative gross domestic product (GDP) growth, the world is searching for new opportunities to cultivate prosperity. Since the early 20th century, oil and fossil fuels have developed into key commodities driving economic growth. In the 1990s, exponential global trade fuelled economic expansion. In the 2000s, technological advancements drove productivity gains. Perhaps, in the coming decades, it will become possible to value previously underrecognized human activities (such as improved quality of life, poverty elimination or a higher sense of belonging) and transform them into measurable economic contributions. Redefining Value: From Outcome-Based Funding to Tradeable Impact 5

Redefining Value From Outcome Based Funding to Tradeable Impact 2025