"Impact investing is critical for providing investments where capital is scarce and for building capacities locally"
Eva Tschannen is Head of Technical Assistance at the impact investment firm, responsAbility. She talks about sustainable finance, what she does in her job, what led her to work there and why she likes the private sector approach to international cooperation.
Author
Eva Tschannen holds a Master’s Degree in International Affairs and Governance from the University of St. Gallen and Sciences Po (Paris). For over seven years, she has worked for responsAbility, a sustainability & impact investment house, as the Head of Technical Assistance. For several years before entering the private sector, she worked for the government with the State Secretary for Economic Affairs, mainly promoting private sector development in the Global South. In this interview, she talks about her current job, what she likes most about it, and why financial actors are critical to reach the Sustainable Development Goals.
Interview by Nicoletta Cimmino.
For people who are unfamiliar with impact investing, can you briefly explain what it is?
responsAbility is a sustainable investment house specialising in impact investment with a global presence. We invest where capital is scarce in three main sectors: financial inclusion, sustainable food & agriculture, and climate finance. While sustainable investments focus on avoiding negative environmental and social effects, impact investing goes even further by targeting a positive impact on the environment and society.
Impact investing goes even further by targeting a positive impact on the environment and society.
What is your role at responsAbility?
I’m responsible for the impact advisory practice that we provide to build the capacity of the companies that we aim to invest in. We do this by mandating specialised consultants using grant funding. You can think of us as non-profit center that provides access to know-how, develops tools and disseminates good practices through peer learning and communication. Combining the provision of access to finance with access to know-how amplifies the development impact of our investments.
Combining the provision of access to finance with access to know-how amplifies the development impact of our investments.
It sounds kind of abstract; can you give a concrete example?
For example, green investments in Sri Lanka: one of our Climate Funds partnered with a Sri Lankan financial institution by providing a credit line for green investments. The financial institution had no prior experience in green lending. To understand the local market potential of energy efficient technologies that significantly reduce carbon emissions I hired a technical expert to conduct a market study. We then explained the findings to the financial institution and supported the definition of a green lending strategy for tapping green market potential that fits their client segment and institutional capacities. We also conducted trainings for loan officers so that they can engage with their clients on the benefits of energy efficient investments.
The role of my team is to work closely with investment teams to investigate support needs, to define projects in close collaboration with the companies, to select, commission and then monitor the experts working on the ground. We do this under the supervision of the grant providers who are asked to sign off on the use of funds and to whom we report on an ongoing basis.
How did you start working in impact investing? Was this your dream job?
It is my dream job today, but at the outset of my career I simply did not know that such positions within asset managers would come into existence. My background is in international affairs, I had a passion for diplomacy and so I anticipated to be working with super-national organisations. I have always been impatient about the speed and depth of change that can be brought through policy reforms, which however have lasting and far-reaching impacts once they become enforced. However, I like working in a fast-paced environment and I missed seeing concrete results so that supporting entrepreneurs in developing countries seemed like the best path for me.
In my current role I particularly appreciate the international working environment, the range of topics and exchange with subject matter experts. I enjoy finding solutions for real business challenges with our investees. A consultant once told me that our impact advisory work is like a Swiss army knife for capacity building. I enjoy having so many tools in our toolbox.
A consultant once told me that our impact advisory work is like a Swiss army knife for capacity building.
How do you convince investors that sustainability or impact investing are worthwhile investments?
I’m not an investment advisor nor am I a financial analyst. However, impact investing has grown and has established a proven track record underlying the feasibility of achieving social as well as financial returns. Also, there is clearly a trend for ESG compliant investments. The drivers for this can be diverse, be it for instance the increasing pressure for good business conduct or the threats of more severe and frequent climate change effects. The increased demand for sustainable investments is much needed.
Unfortunately, it remains complex to understand the sustainable investment landscape. And questions arise such as, “Is this investment sustainable?”, “How is the impact measured?” or “Is it just greenwashing?” So for us as an impact investor we need to communicate even more about our impact strategy and proof our additionality. More market transparency is critical and over the last year the European Union introduced the Sustainable Finance Disclosure Regulation to classify funds based on the product’s sustainability objective. All funds managed by responsAbility now fall under Article 9 of SFDR, which is also referred to as “dark green”.
