Beyond the Numbers
responsAbility Impact Report
1. IMPACT REPORTING 2023
1.2 OUR APPROACH TO IMPACT & ESG
1.3 IMPACT INDICATORS WITH COMMENTARY
1.4 BEYOND THE NUMBERS: REVEALING THE IMPACT AND STORIES BEHIND THE INDICATORS
1. IMPACT REPORTING 2023
1.1 FOREWORD
Dear Impact Investor,
Welcome to our Corporate Impact Report 2024, where we reflect on and analyze the impact achieved in 2023. In this report, we aim to go beyond the numbers, exploring the meaning and methodology behind our indicators. As impact investing continues to expand, transparent reporting remains a crucial element in enabling investors to understand the tangible outcomes achieved through their investments and ensuring fund managers remain accountable for their stated goals.
The challenges we face remain immense: Over 20% of the global population still lives on less than USD 3.65 a day1, while the climate crisis continues to accelerate. Addressing these challenges will require investment on a massive scale. To meet global net-zero ambitions, the International Energy Agency estimates that clean energy investments must triple by 20302. Addressing these challenges requires resources and robust systems to measure and maximize their effects.
Our impact measurement process combines rigor and collaboration. This report is dedicated to the importance of robust impact measurement and the meticulous effort involved in collecting and verifying impact data across diverse business models in emerging economies. By showcasing the achievements of our portfolio companies, dedicated staff and engaged investors, we aim to highlight the tangible progress made toward addressing the pressing challenges of our time.
Paul Hailey
Head of Impact & ESG
1.2 OUR APPROACH TO IMPACT & ESG
Since our founding in 2003, impact has been at the core of our investment strategy and is key to our entire investment model. Over the years, we have refined our approach, addressing new investment themes and adopting best practices across asset classes. Our focus is on investments that avoid harm and actively drive meaningful environmental and social progress.
Balancing risks and opportunities
For every investment, responsAbility identifies and mitigates potential environmental, social, and governance (ESG) risks that could adversely affect portfolio companies, their customers, employees, or the broader community and environment. While ESG risk management ensures sustainability, our investments go further, targeting business models with a clear focus on positive impact in emerging markets. This dual approach – managing risks and fostering opportunities – sets the foundation for impactful, sustainable growth.
Three pillars of intentional impact
Each investment is guided by three defined impact strategies aligned with the Sustainable Development Goals (SDGs), to ensure intentionality throughout the process. These pillars anchor our impact thesis, shaping investment strategies that address critical challenges such as financial inclusion, gender equality and environmental sustainability.
Direct engagement
Annual data collection from our portfolio companies forms the backbone of our impact reporting. Using customized templates tailored to diverse business models and geographies, we directly engage with our portfolio companies to gather detailed insights and monitor progress.
Tailored indicators
Indicators are carefully selected to align with our impact goals, adapt to the specificities of each business model, and reflect the nuances of various asset classes. For debt investments, indicators often focus on scalability and outreach, such as the number of end-borrowers, hectares under sustainable management or emission reductions achieved. Equity investments, on the other hand, emphasize long-term engagement, innovation, and transformation. Indicators also integrate globally recognized standards to ensure relevance and consistency while reducing the reporting burden on portfolio companies.
Impact attribution
We provide our investors with a clear understanding of the proportional impact directly attributable to their investments. For example, if responsAbility provides USD 1 million in funding to a portfolio company managing USD 10 million in assets, and that company serves 10,000 clients, we attribute 10% of the impact - 1,000 clients - to our investment.
Building confidence through transparency
Our robust impact measurement framework demonstrates accountability to our mission of mobilizing capital and investing in emerging markets while ensuring alignment with global best practices. By providing transparent insights into the outcomes of our investments, we empower investors to see the tangible progress their capital supports. This approach fosters confidence and reaffirms the transformative potential of achieving financial return while generating a positive societal and environmental change.
1.3.1 UNDERSTANDING OUR IMPACT NUMBERS
Our impact data offers two perspectives: “total data” and “attributed data”. Together, these perspectives provide insights into the scale, scope, and specificity of responsAbility’s impact across its portfolio companies.
Total data: This perspective captures the aggregate impact generated by all portfolio companies across the three investment themes: Financial Inclusion, Sustainable Food, and Climate Finance (excluding the SIFEM mandate). It highlights the comprehensive scale of operations but does not isolate responsAbility’s specific share, as many portfolio companies receive funding from multiple sources.
To better reflect changes over time, we provide two types of year-on-year comparisons:
Overall change: Reflects shifts across the portfolio, including additions of new portfolio companies or exits of existing ones.
Like-for-like change: Focuses solely on portfolio companies that remained in the portfolio and reported data consistently over both periods. This isolates the growth or decline attributable to ongoing operations.
Attributed data: This perspective reflects responsAbility’s specific contribution, based on the ratio of our investment to each portfolio company’s assets or other relevant indicators. Attributed data provide a more precise view of the direct impact achieved through our investments. However, they are reported for a narrower range of indicators that directly link to the type and scale of the investment made. A glossary of indicators, available at the end of this report, provides further details on the attribution methodology.
By combining these perspectives, we gain an in-depth view of our impact. For instance, although the total number of end-borrowers decreased due to portfolio turnover, the change in like-for-like data is driven by robust growth among microfinance institutions in India, which primarily serve rural, low-income households. Their smaller average loan sizes allow us to reach a broader client base with critical financial services.
1.3.2 TOTAL DATA
This table provides a comprehensive overview of the total impact generated across all portfolio companies, highlighting the overall scale and impact performance of our investments, including year-over-year comparisons to track growth and changes across the portfolio.
Detailed descriptions of the indicators can be found in the glossary.
* While all borrowers are customers, not all customers are borrowers: "Customers" include anyone using the portfolio company’s services — such as savings holders, insurance clients, or training attendees — not just those with loans. "Borrowers" are specifically those customers who have taken a loan.
1.3.3 ATTRIBUTED IMPACT DATA
This table focuses on responsAbility’s attributed impact, reflecting our specific contribution to the portfolio companies’ results, based on the proportion of our investment relative to their total assets or relevant indicators.
1.3.4 COMMENTARY ON 2023 IMPACT DATA
Beyond the approach set out above, there are some results that require further commentary:
- Insurance products: The notable rise in customers of insurance products is driven by increased provision from Indian microfinance institutions (MFIs) and one African portfolio company. These entities also contributed significantly to growth in lending to rural areas.
- Healthcare & education loans: The reduction in healthcare-related lending reflects the exit of some portfolio companies and a reduction in Covid-era healthcare funding. However, education lending expanded, reflecting rising demand from both portfolio companies and end clients.
- Energy generated / CO2 emission reductions: Among our Climate Finance portfolio companies, some indicators – including CO2 emission reductions, clean energy generated, newly installed clean energy capacity, and number of new people provided with access to energy – declined during this reporting period. This decline can be attributed to reduced sales among energy access companies and portfolio turnover. It is important to note that these figures represent new impacts achieved during 2023, rather than the cumulative achievements from total investments. The relatively smaller decline in capacity installed versus emission savings can be attributed to one portfolio company in particular that shifted from a product strategy based on solar lanterns (low capacity installed, relatively high emission savings) to larger solar-based products with higher capacity installed per dollar cost.
- Gross loan portfolio in energy efficiency and clean energy across all portfolio companies: Lending in this sector increased among our Financial Inclusion portfolio companies overall, reflecting the growing engagement of financial institutions within our portfolio in this space.
1.4 BEYOND THE NUMBERS: REVEALING THE IMPACT AND STORIES BEHIND THE INDICATORS
1.4.1 AVERAGE LOAN SIZE TO MICROFINANCE END-BORROWERS
Financial inclusion intends to create access to financial services for individuals and small businesses at the lower end of the income pyramid - often excluded by traditional banking due to perception of high risk, low profitability, and small transaction volumes.
A key indicator for assessing the outreach to underserved groups, such as microenterprises and small and medium-sized enterprises (SMEs), is the average loan size. This indicator is calculated by dividing the total value of loans by the number of loans disbursed. By excluding consumer loans, it specifically measures the extent to which financial institutions serve lower-income segments.
However, interpreting this indicator requires nuance. For microfinance institutions (MFIs), average loan sizes range from USD 600 in South Asia to USD 3,000 in Sub-Saharan Africa, reflecting varying financial needs, even among microenterprises, within different economic and financial sector contexts, as well as varying degrees of rural/urban borrowers.3 Smaller loan sizes indicate outreach to lower-income populations, though an increase over time may signify the growth of these businesses rather than a shift away from the target demographic.
In contrast, SME loans cater to more formalized businesses with larger workforces and higher revenues. Loan sizes ranging between USD 15,000 and USD 50,000 – a segment that remains underserved by traditional banks - are critical to strengthening local economies, creating jobs, and driving poverty reduction. Financial inclusion funds play a transformative role in bridging this gap, supporting businesses that serve as the backbone of emerging economies.
Chart 1. Average loan sizes to microenterprises and SMEs in responsAbility’s financial inclusion portfolios
Source: responsAbility Investments, 2023.
Case study: Enabling people and SMEs through Annapurna Finance
Meet our portfolio company Annapurna, a microfinance institution in India, with an average loan size in 2023 of USD 258.70, providing opportunities to underserved and marginalized populations through microfinance since 2009. Watch the short film to see how Annapurna’s approach is making a difference on the ground.
1.4.2 FEMALE END-BORROWERS OF PORTFOLIO COMPANIES
Despite significant strides in gender equality, women in emerging economies consistently face greater barriers to accessing finance. Female-owned SMEs often encounter difficulties in obtaining credit, and women individually are less likely to have access to credit from a formal financial institution.
Tracking the share of female borrowers from our Financial Inclusion portfolio companies provides a straightforward yet important measure of a financial institution’s commitment to addressing gender inequality. However, this indicator does not capture the full picture. Women often receive smaller, shorter-term loans, particularly when they have limited access to collateral.4 Additionally, SME banks often do not collect data on whether their SME borrowers are women-led.
Nonetheless, responsAbility’s Financial Inclusion portfolio demonstrates strong outreach, with a majority of end-borrowers across regions being women. In addition, many responsAbility products will directly target portfolio companies that themselves are led by women or have higher proportions of female senior management and/or staff. responsAbility is also a member of 2X Global, a forum and standard-setter for best practice around gender-lens and gender-smart investing.
Chart 2. While the proportion varies by region, on average we are catering to a majority of female borrowers
Source: responsAbility Investments, 2023, & World Bank Findex, 2021
Case study: Empowering women trough Annapurna Microfinance
Our Financial Inclusion portfolio company Annapurna places a strong emphasis on empowering women, with 98% of its borrowers in 2023 being female. This reflects Annapurna’s commitment to fostering inclusive opportunities and supporting the most marginalized population. Watch our video to learn how this approach is making an impact in these communities.
1.4.3 HECTARES OF LAND UNDER SUSTAINABLE MANAGEMENT AND CERTIFIED HECTARES
Agriculture’s role in deforestation, pesticide overuse, and soil erosion contribute to biodiversity loss and accelerates climate change.5 With a growing global population, sustainable food systems are essential to increase food production while protecting ecosystems.
responsAbility invests in agricultural value chain actors (AVCAs) that apply best practices in sustainable land use, while also contributing to income generation in their communities. Portfolio companies must meet stringent ESG criteria, ensuring their operations adhere to sustainable management standards. Many of these portfolio companies achieve external certification such as Fairtrade, Rainforest Alliance, and USDA Organic, which provide additional assurance of environmental and social responsibility. Two-thirds of our agricultural portfolio companies have organic certification, whereas only 2% of agricultural land globally is certified organic.6
Chart 3. Most of the land managed by our portfolio companies is certified.
Source: responsAbility data, 2023. Please note that hectares under sustainable management refers to hectares managed by our portfolio companies, all of which have undergone a rigorous impact and ESG assessment.
Case study: Driving organic farming with Suminter
Suminter, a responsAbility portfolio company based in India, achieved 100% certified organic cultivation across its hectares in 2023. Specializing in sustainable agriculture, Suminter works with farmers to produce organic food and fibers. This milestone reflects Suminter's commitment to sustainable agriculture. Watch the video to see the tangible impact of Suminter’s efforts on farmers and their communities.
1.4.4 ANNUAL AND LIFETIME CO2 EMISSION REDUCTIONS
Reducing greenhouse gas emissions is one of the biggest challenges of our generation. Failure to tackle climate change will be catastrophic for all parts of the planet, yet we are far from being on track for even a 2-degree pathway. A wide variety of tools are available to achieve this reduction, while addressing poverty and minimizing social disruption. These include increasing the share of renewable energy, promoting energy efficiency, and applying climate-smart agricultural practices.
responsAbility supports emission reductions through two approaches. The first is direct financing of climate solutions, such as solar home systems, solar installations for commercial and industrial businesses, e-mobility solutions, and circular wastewater treatment systems. The second is an indirect approach, providing financing to financial institutions in emerging economies that offer climate-positive lending to end users. For both direct and indirect investments in climate solutions, responsAbility’s proprietary monitoring tool tracks emission reductions from over 85,000 “sub-loans” (as of end-2023), enabling precise impact measurement. This dual strategy delivers measurable contributions to decarbonization while benefiting underserved communities.
responsAbility Climate Finance portfolio companies achieved 7.9 million t CO2e in lifetime emission savings from projects put in place in 2023 alone. Of these, 2.2 million t CO2e can directly be attributed to responsAbility investments.7 Note that these savings come from the emission reductions achieved over the lifetime of each product put in place by Climate Finance portfolio companies over the course of 2023. Data on the annualized emission savings achieved by all portfolio companies in 2023 can be found in Section 1.3.
Chart 4. Annual attributed CO2 reductions, since inception
Source: responsAbility data, 2015-2024. Please note that the chart shows the total annual emission savings achieved by all climate finance projects financed by responsAbility since 2015.
Case study: Decarbonizing new markets with Copper Mountain Energy (CME)
CME, a responsAbility Climate Finance portfolio company in Vietnam, specializes in renewable energy solutions, driving decarbonization through clean energy installations, including Commercial & Industrial (C&I) solar projects. In 2023, CME achieved lifetime emission reductions of 1.1 million t CO2, with annual reductions of 46,000 t. Watch our video to hear from CME’s CEO about the company’s impactful projects.
2. HIGHLIGHTS & INSIGHTS 2023
2.1 OVERVIEW 2023
Effective impact investing happens at the intersection of what the world needs most and where capital can drive transformative change. This journey is one of continuous evolution, shaped by key milestones and strategic choices. Reflecting on our milestones in 2023, we proudly celebrate the 20th anniversary of our Financial Inclusion flagship investment product — which was created to empower underserved communities and is anchored in our vision of a sustainable world with access to opportunities for all.
2023 was also marked by global shifts and an intensified call for climate action and social equity. Record-breaking heat waves and extreme weather events underscored the urgency of climate action, while India’s rise as the world’s most populous country reinforced Asia’s expanding influence in the global economy. In this context, our USD 500 million Asia Climate Strategy contributes to the urgent need and vast potential for a low-carbon transition across the region.
Amid rising geopolitical tensions and mounting climate pressures, our global food system encountered unprecedented challenges, underscoring the urgent need to transform current agricultural practices. In 2023, we launched three strategic investment solutions in Sustainable Food, focusing on food systems transformation alongside an innovative Climate-Smart Agriculture strategy rooted in scientific research.
2023 will also stand out as a year of new beginnings, as we took on the mandate to manage the Swiss Development Finance Institution (DFI) portfolio. This mandate not only extends our impact potential but also brings a dedicated Fund Investments team on board, enhancing our ability to scale sustainable solutions across emerging markets.
2.2 FUND INVESTMENTS: MANAGING THE SWISS DEVELOPMENT FINANCE INSTITUTION
Reflecting on our journey over the past year, one milestone stands out: our appointment as the new portfolio manager for the Swiss Investment Fund for Emerging Markets (SIFEM). SIFEM, the development finance institution of Switzerland, has been pivotal since its establishment in 2011.
This achievement represents more than just a mandate; it is a profound opportunity to scale our expertise in driving impact through sustainable investing in emerging markets. Managing SIFEM has also opened a new chapter for responsAbility: entering the fund investments asset class. This new frontier has great transformative potential to further scale our impact. Fund investment structures allow us to aggregate and allocate capital across a diversified portfolio of funds, enhancing our ability to mitigate risks and amplify positive outcomes. The scaling capability of fund investments means we can reach more sectors, geographies, and innovative projects, significantly increasing our overall impact.
To support this new venture, we have expanded our team with highly qualified fund investment professionals. With a combined track record of decades and representing multiple countries, they bring the necessary expertise and diverse backgrounds to ensure that we deliver on our commitments to SIFEM and its stakeholders. Our journey with SIFEM is just beginning, and we are excited about the possibilities that lie ahead.
Interview with Jörg Frieden Chairman of the Board SIFEM
Welcome Mr. Frieden and thank you for speaking with us. To start, could you provide a brief introduction to SIFEM?
The Swiss Investment Fund for Emerging Markets (SIFEM), Switzerland’s development finance institution (DFI), pursues impact-driven investments in private equity and financial institutions across emerging markets. Fully owned by the Swiss Confederation, SIFEM aligns with Swiss government development objectives, under the oversight of a board of directors appointed by the Federal Council.
Its investment management is entrusted to responsAbility, which oversees both the existing portfolio and new investments. With a USD 1 billion balance sheet, of which two-thirds is allocated to equity, the Swiss Investment Fund for Emerging Markets adopts a patient, long-term approach, reinvesting returns into new projects without reliance on subsidies or concessional finance, to promote sustainable growth.
Jörg Frieden
Chairman of the Board SIFEM
How has SIFEM's approach to impact investing evolved since its establishment?
SIFEM has always followed a long-term, patient approach to impact investing. Our focus has been on equity investments, working closely with trusted local partners, such as fund managers and financial institutions, to catalyze and mobilize private capital at fund level, thereby creating meaningful impact. While our core principles have remained consistent, the global landscape has changed significantly since we started.
In the past, there was greater optimism about the rapid development of middle-income countries. However, today we are navigating a more complex environment, influenced by geopolitical tensions, protectionist temptations, slower economic growth in some countries and much higher growth in others. In response SIFEM has adjusted its portfolio, balancing relatively safe investments in larger established funds with riskier investments in new initiatives or more challenging countries. With its extensive network, responsAbility has helped to manage this risk-adjusted approach.
Looking ahead, which sectors or regions do you see as having the greatest potential for impact, and how is SIFEM positioning itself to capitalize on these opportunities?
We continue to see significant potential in regions like Sub-Saharan Africa, where the need for job creation and gender equality is particularly urgent. Our investments are focused on creating employment opportunities and increasing the participation of women in the workforce, which are crucial for achieving long-term, sustainable growth.
Sector-wise, we are increasingly directing our efforts toward projects that promote energy efficiency and sustainable resource management. These areas are vital for both local development and global sustainability. In collaboration with other development finance institutions, we will provide technical assistance to help companies adopt sustainable practices and technologies. By doing so, we aim to enhance the long-term impact of our investments.
What makes SIFEM’s model distinct compared to other development finance institutions?
Unlike many DFIs that operate as standalone government-backed institutions, SIFEM outsources its investment management to a private asset manager with expertise in impact investing and emerging markets. responsAbility handles SIFEM's investment strategy, due diligence, and portfolio management, allowing SIFEM to leverage private-sector expertise and remain flexible in its operations.
This model is also more cost-effective due to its lean structure, relying on responsAbility to minimize overhead and administrative burdens. This efficiency allows SIFEM to channel more resources toward investments that deliver meaningful development impacts, rather than sustaining a large, in-house operational framework.
How does SIFEM’s work contribute to closing the USD 4 trillion annual financing gap identified by the United Nations to achieve the Sustainable Development Goals (SDGs) by 2030?
The USD 4 trillion figure highlights the significant gap between the financial resources needed to meet the SDGs and the current level of investment in developing countries. While it is a daunting number, it is important to remember that external financial solutions alone will not resolve the challenges faced by emerging and low-income economies.
DFIs like SIFEM play a crucial role in creating the conditions necessary for sustainable development. Our mission is to empower local entrepreneurs—both men and women—to seize opportunities, create jobs, and add value to their communities. By facilitating these opportunities, we not only stimulate economic growth but also build trust in local policies, institutions, and market frameworks. DFIs act as catalysts, helping to establish best practices that local investors can adopt and replicate, thereby magnifying the impact of our investments.
According to UN estimates, the world is facing an annual financing gap of about USD 4 trillion to achieve sustainable development
What role do you believe DFIs and SIFEM in particular can play in creating long-term, sustainable growth in emerging markets?
DFIs have a unique and vital role in bridging the gap between public development goals and private sector investment. Our primary focus is to create stable and secure investment environments that encourage both local and international investors to participate in the development of emerging markets.
At SIFEM, we empower local entrepreneurs by providing them with the necessary capital and support to succeed. Our long-term investments not only create jobs and enhance livelihoods but also promote sustainable business practices that are essential for lasting development. Ultimately, DFIs like SIFEM pave the way for more private capital to flow into emerging markets, which is key to achieving sustainable, long-term growth in these economies.
2.3 SUSTAINABLE FOOD: INNOVATING AT THE INTERSECTION OF CLIMATE AND AGRICULTURE
Suhasini Singh
Head of Sustainable Food Debt
As the links between climate change and food security become increasingly urgent, the question is no longer whether to act but how to innovate. At responsAbility, we view this challenge as an opportunity—a call to rethink the agricultural landscape by investing in sustainability, resilience, and equity. With this vision in mind, we launched the first Climate-Smart Agriculture investment solution, which focuses on environmental sustainability and supports smallholder farmers8 and promotes the empowerment of women, who are often most affected by these challenges.
The Fund partners with donors who finance the Fund’s Technical Assistance Facility (TAF), advancing climate resilience and gender-inclusive agricultural practices through innovative, grant-funded projects. These projects address critical knowledge gaps in areas such as climate risk assessments, ESG integration, climate-smart agriculture, and gender equity. Through capacity building, portfolio companies are empowered to adopt best practices, meet regulatory and market expectations, and foster sustainable, inclusive growth.
The imperative for climate-smart agriculture
The global food system is both an economic cornerstone and a vital lifeline for billions of people. It is, however, at a critical juncture: Agriculture currently contributes more than one-third of global greenhouse gas (GHG) emissions, while remaining among the sectors most vulnerable to climate change.9
In emerging markets, where agriculture often forms the backbone of the economy and employs much of the population, the stakes are particularly high. These regions are already experiencing the impacts of climate change, and without intervention, the consequences could be severe.
Yet, within this challenge lies a profound opportunity. By transitioning to climate-smart agricultural practices, we can contribute to addressing the sector's environmental footprint while simultaneously enhancing its resilience to climate-related shocks. Climate-smart agriculture not only reduces emissions and increases climate resilience but also fosters biodiversity, improves soil health, optimizes water use, and helps to create sustainable livelihoods for farming communities.
The butterfly effect of investing in gender equality
Women are central to global food production, contributing up to 80% of food in developing economies and nearly half of the world’s total.10 However, despite their critical role, they often face barriers such as limited access to land, markets, and education.11 Studies suggest that if women had the same access to resources as men, farm yields could increase by 20–30%, potentially reducing the global number of people exposed to hunger by 100-150 million.12 Our strategy emphasizes gender equity, ensuring women have the tools and opportunities to take leadership in climate-smart agriculture. By addressing these disparities, we aim to boost productivity and resilience across entire communities.
Through the technical assistance facility, advisory projects were designed for portfolio companies whereby gender experts were onboarded to identify barriers to women's participation in their business operations. The resulting action plans focus on refining human resources policies, targeted capacity building, and enhancing access to resources while providing specialized training to female farmers.
Smallholders, who represent around 80% of all farms globally, are vital contributors to global food production and security.8
Food systems currently contribute to more than 1/3 of global GHG emissions9
Women produce half of the world’s food yet don’t receive the same opportunities as their male counterparts.10
The three pillars of climate-smart agriculture
Climate change mitigation
Agriculture is a major source of GHG emissions, but it also holds immense potential for mitigation. Practices such as no-till farming, cover cropping, organic farming, and agroforestry can significantly reduce emissions.13 Investments in renewable energy and energy-efficient farming operations can further reduce the sector's carbon footprint while fostering economic development and job creation.
Climate change adaptation
Adaptation measures in agriculture are crucial for enhancing resilience against the adverse impacts of climate change, especially in emerging markets where climate risks pose a direct threat to food security and rural livelihoods. These measures include developing and implementing climate-resilient crop varieties, optimizing water use efficiency, and adopting soil conservation practices. Additionally, investments in early warning systems and climate risk insurance help provide vital protections for farmers, mitigating the financial impact of climate-induced losses.
Sustainable production and consumption
To meet the nutritional demands of a global population projected to reach 9.7 billion by 205014, it is essential to integrate sustainable natural resource management with farming practices that support ecosystem services. Solutions include recycling agriculture waste, reducing supply chain losses, and optimizing storage infrastructure. Additionally, practices such as precision agriculture, integrated pest management, and efficient warehousing & transportation help reduce environmental impact while boosting food output.
Science as the foundation for innovation
To ensure effective and localized impact, we anchored our investment solution in scientific research. Our partnership with CGIAR, a leading global research organization, ensures that our investments are informed by the latest scientific insights and are tailored to address specific regional and crop-related challenges. This collaboration, funded through the technical assistance facility, allows us to refine our strategy continuously, ensuring that it remains effective and relevant in a rapidly changing world.
“Science plays a critical role in enhancing climate-smart agriculture, providing insights that strengthen resilience and sustainability in food systems."
Richard Newman, co-lead CGIAR Hub for Sustainable Finance
“We’re excited to partner with responsAbility to turn research into actionable solutions, equipping smallholder farmers to meet the challenges of a changing climate effectively.”
Godefroy Grosjean, co-lead CGIAR Hub for Sustainable Finance
In late 2023, we launched our USD 500 million Asia Climate Strategy, a blended investment approach designed for institutional investors to catalyze investment in high-impact sectors capable of significant CO2 reduction across emerging Asia. While tackling climate change at a global level is essential, generating big wins early is crucial, as the cumulative build-up of greenhouse gases is what drives long-term climate change.
One of these big wins could be emerging and developing Asia, which currently contributes over 43% of global greenhouse gas emissions. Considering that Asia is home to 60% of the global population, this might not be surprising, but relative to the economic development stage and the region's global economic contribution, this number is alarmingly high. Asia's economies make up only about 32-35% of the global economy, meaning their emissions are disproportionately large for their economic size. This disparity is only set to grow, as emerging Asia, which consistently contributes around 50% to annual global GDP expansion, is poised for even faster growth in the coming years. These economies are just at the starting gates, and the urgency to decarbonize becomes ever more critical.
Ewout Van der Molen
Head of Climate Finance
Contribution to global GDP growth by emerging and developing Asia
Emerging and developing Asia, GDP, share of world total
Emerging and developing Asia's share of global GHG emissions
Sources: IMF: Oct 2024, Climate Watch: June 2024
Opportunities in transitioning Asia towards net zero emissions
“Greening” emerging Asia’s runway is not only a must if we are to take climate change mitigation seriously; it is also a vast opportunity for the region. Transitioning Asia to a low-carbon economy can unlock additional growth prospects, offering new economic opportunities that generate jobs and attract investments in sustainable industries. Achieving net zero emissions by 2050 could boost GDP in the Asia-Pacific region by as much as 6.3% above the predicted levels under a baseline scenario15 and create 180 million jobs16, further supporting the green collar workforce that is already emerging.
Asia remains the fastest-growing region for electricity consumption, yet 70% of its energy still comes from fossil fuels.17 Shifting away from this dependence will require substantial investment across the entire energy value chain - from generation and supply chains to manufacturing, asset repurposing, storage, and innovation. Investment must not focus only on how energy is produced but also on how it is consumed.
Key investment areas include:
- Scaling renewable energy generation
- Strengthening supply chains
- Expanding manufacturing capacities for green technologies
- Developing electric vehicle infrastructure
- Boosting energy storage solutions
- Driving innovation in energy efficiency
This vast transformation demands attention from both public and private capital to create the energy ecosystem of the future.
For impact investors, this transition offers an opportunity to capitalize on the convergence of strong economic growth and the urgent need for climate action. By aligning their capital with Asia’s low-carbon future, investors can play a pivotal role in sustainably shaping the next phase of global development.
70% of Asia's energy still comes from fossil fuels.17
Achieving net zero emissions by 2050 could create 180 million jobs in the Asia-Pacific region.16
Blending capital to scale needed energy transition investments
Annual clean energy investment in emerging and developing economies (EMDEs) must increase more than sevenfold - from under USD 150 billion in 2022 to over USD 1 trillion by 2030 - to keep the world on track to reach net-zero emissions by 2050. Governments alone cannot bear the financial burden of this monumental shift. To meet global climate targets, over half of this capital will need to come from private sector investors, underscoring the critical role of private finance in driving sustainable development.18
One of the most effective ways to unlock this private capital at scale is through blended finance, which combines public and private funding to catalyze investment in sectors or regions that might otherwise struggle to attract sufficient resources. Public capital, often provided as concessional finance, can be used strategically to reduce both real and perceived risks associated with clean energy investments in EMDEs. This de-risking mechanism allows private investors to enter new markets or projects that might seem too risky otherwise.
Blended finance structures offer flexibility, accommodating various financing structures that align with different investors’ risk tolerance, return expectations, and strategic objectives. For example, concessional public capital can take on more junior or subordinated positions, absorb initial losses, or offer guarantees, thus protecting private investors and making these investments more attractive. This model helps to scale up clean energy projects and fosters a more favorable investment environment in EMDEs, driving long-term, sustainable growth.
This blended finance structure has been instrumental in setting up and scaling our Asia Climate Strategy. On top of a first loss junior tranche provided largely by public sector investors, the Asia Climate Strategy has been successful in mobilizing substantial private sector investments in the senior tranche, a structure we have successfully applied in several other of our Climate Finance strategies.
2.5 FINANCIAL INCLUSION: OUR FLAGSHIP PRODUCT TURNED 20
In 2003, we started with a vision to invest for a sustainable world with access to opportunities for all. As our flagship product celebrates its 20th anniversary, we look back on two decades of empowering individuals and communities through financial inclusion. From the start we have built our investment products to ensure capital could be transformative - not only for investors but also for people and the planet. By focusing on private markets across emerging economies, we have been able to direct much-needed capital into regions where traditional financing is often scarce.
Democratizing private market investments
Historically, private market investments - such as private debt and equity - were the domain of professional investors seeking alternatives to diversify their portfolios or meet specific risk-return profiles. These markets were largely inaccessible to retail investors, constrained by factors such as higher investment minimums and lower liquidity.19
Over the past decade, however, we have witnessed a shift. The demand for access to private markets has grown as retail investors increasingly seek new opportunities to diversify their portfolios, generate tangible impact, and explore alternative risk-return profiles. The democratization of private market investments is no longer a distant vision20 - it is a reality, and we are proud that our flagship product has been at the forefront of this movement since its inception in 2003.
A visionary approach from the start
Whether through visionary foresight or fortunate timing, our flagship product was designed with retail investors in mind. Grounded in our original investment theme Financial Inclusion, it has contributed to financing micro, small, and medium-sized enterprises (MSMEs), helping these businesses thrive. Through gender lens investing, it has played a role in narrowing the gender gap, while also addressing the financing needs of rural borrowers - an often-overlooked segment in traditional financial markets.
Jaskirat Chadha
Head of Financial Inclusion Debt
Number of end borrowers directly reached:
10.6m
Number of female end borrowers directly reached:
7.3m
Number of rural end borrowers directly reached:
5.6m
Impact numbers that tell the story
Since its inception in 2003 responsAbility has disbursed USD 12.3 billion to Financial Inclusion, directly reaching 10.6 million borrowers, of whom 7.3 million have been female and 5.6 million have been in rural areas.21 As we look back on these 20 years, it’s incredible to think about the lives touched by this product. It is not just the scale of the capital disbursed that is impressive, but the diversity of sources fueling that impact. This product connects retail investors - people of all walks of life who want to create meaningful change - with those who need the impact most. In many ways, the strategy is just the bridge, enabling a global connection between capital and communities.
Looking Ahead
While we celebrate these two decades, we remain focused on the future. The next chapter promises even greater potential as retail investors continue to seek meaningful investments, and the demand for impact-driven finance grows. Our commitment to financial inclusion and sustainable development remains as strong as ever, and we are excited to continue this journey with our investors - both old and new.
Key terms and definitions
Please note that all Indicators are as of 31st December 2023, unless otherwise indicated in the definition.
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