Impact Investment Ecosystem

Impact Investment Ecosystem


Impact Investment Ecosystem aims to chart a roadmap for impactful investment in the Kingdom of Saudi Arabia by establishing an integrated network of all ecosystem elements. This network is intended to create a supportive and conducive environment for impactful investment growth and mobilize capital towards solutions that address social and environmental challenges. It also seeks to expand the scope of investments directed toward sustainable impact and activate the roles of various stakeholders in maximizing their impact.

Data & Communication

The availability of accurate and comprehensive data contributes to rational and effective decision-making, as well as to the identification of priority social and environmental challenges, both locally and globally. In particular, data is the first step in the influential enterprise industry, mainly linked to governance, impact measurement and knowledge ecosystems. This component also provides data on society, government and the business community, also data on economic, demographic, social and environmental fields. It also aims to achieve authentic, comprehensive, up-to-date and accessible data for all stakeholders.

Issues

Societal issues are those that affect different groups in society or the environment, and that can be addressed by impactful projects. Societal issues are the component that deals with data, information and analyses it, with the aim to presenting phenomena, societal problems and the underlying causes of such problems in society, as well as studying their relevance to other problems and phenomena. This component is mainly linked to data being the source on which it is based, as society’s issues are direct inputs to the investment solutions component.

Investment Solutions

Investment solutions are specifically designed to address the challenges and underlying issues faced by society. It is essential that business models are innovatively crafted to contribute to solving societal problems while meeting profitability targets. These solutions encompass strategies and tools in the field of impact investment, aimed at maximizing returns and managing associated risks in a professional manner. Crucially, the business model prioritizes social or environmental objectives, ensuring alignment between social and financial returns. In this context, business indicators also incorporate social or environmental metrics

Companies

Companies are entities that provide services and products to address issues, either through their business models or through the services and products they offer. Examples of such organizations include social entrepreneurship companies, cooperatives, associations, and other forms. This component supports the transitional phase of emerging organizations that are new and developing a distinctive product or service for launch in the market. As organizations mature, they achieve sustainability and preparedness for business expansion and community service.

Market

This component is an essential part of enabling organizations’ access to the market and providing various supportive services that maximize impact and profitability. This is accomplished through the use of marketing and awareness techniques to promote and disseminate the concept of impactful investment, thereby increasing demand for products and services. Its primary objective is to achieve attractive financial returns while also enhancing consumer demand for these services and products

The financing Channels

It is the means or channel that facilitates, manages, and monitors the flow of funds between financiers, whether individuals or organizations, as well as between funding or investment opportunities, whether for studying societal issues, producing investment solutions, or supporting mature and emerging companies. This component is interconnected with financiers, investors, and the accelerator of the influential enterprise industry, as well as with the outcomes of impact, where it contributes to the returns

The financier & Investor

Any individual or entity committed to the establishment of capital with the anticipation of receiving financial and social returns within specific conditions and specifications to accomplish a social objective, whether it be studying societal issues, developing investment solutions, or supporting mature and emerging companies. Investors may originate from the private, public, or non-profit sector, and funding forms encompass grants, loans, investments, and all other funding avenues.

Legislation, enablers, culture, catalysts

The environment includes all capabilities, incentives, and legislation related to the investment sector, which are directly or indirectly impacted. This component essentially provides the necessary frameworks, enabling parties to operate within the ecosystem and share value. The environmental component includes regulations, legislation, grants, labor subsidies, tax or rent exemptions, as well as the removal of certain controls and improvements in infrastructure. In general, government entities play an important role in empowering the impactful investment market through this component.

Building Abilities, Knowledge

Capacity-building and knowledge are the key pillars that enhance the characteristics, efficiency, productivity, and performance of individuals and organizations. This component aims to develop the skills, capacities, actions, and resources necessary for individuals and organizations to efficiently fulfill their roles in the ecosystem, as well as to adapt to and address variables and risks. Additionally, this component works to provide knowledge capabilities and services for the development of the sector and the ecosystem. It is also closely linked with the cycle of returns, impact, and financing, providing the ecosystem leader with forward-looking visions to aid in market development.

Measurement Frame, Integration, Support & Advocacy, Governance, Technical Structure

The Ecosystem Leader is the party responsible for the leadership, structure, and performance management of the ecosystem. Ecosystems, in general, are built upon common goals and values, necessitating coordination to efficiently and effectively achieve them. It should be noted that the leader of the ecosystem does not operate hierarchically, but rather systematically, collaborating with various partners to enhance the ecosystem’s shared value. One of the roles of the ecosystem leader is to engage in advocacy in market policymaking and utilize their influence to engage with government departments, service providers, investors, and broader stakeholders to address risks, constraints, and challenges. Additionally, the roles of the ecosystem leader include setting governance frameworks, managing risks at the ecosystem level, and establishing the necessary measurement frameworks to ensure the sustainability of the ecosystem through learning, innovation, accountability, indicators, and impact.