Debt funds are an important vehicle for DFIs to achieve development impacts and target harder-to-reach regions and recipients.

Together with OeEB, DEG has engaged Steward Redqueen to analyze the impact management systems of debt fund managers and identify recommendations for the effective integration of debt funds into the updated Development Effectiveness Rating (DERa 2.0).

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The new country and sector model for DEG’s Development Effectiveness Rating (DERa) evaluates the development effects of investments based on several dimensions.

The study by the Overseas Development Institute (ODI) explains the underlying economic theory as well as the applied methodology.

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Digital technologies have the potential to positively influence many aspects of human development. For instance, they can promote financial inclusion and education, thereby directly contributing to the achievement of the UN Sustainable Development Goals (SDGs). Consequently, an increasing number of investors are seeking to invest in companies that offer digital solutions, either directly or indirectly through technology funds.

However, the rapid pace of technological progress can also lead to new environmental and social risks, such as issues related to data and customer protection, data security, or algorithmic discrimination.

These issues are particularly concerning for sustainable investors and development financiers. In collaboration with its subsidiaries, DEG Impact (financed by the AfricaGrow TA Facility) and DEG Impulse, DEG has developed a market study and a guide for investors to contribute to the current discourse on responsible digitalization. The market study provides an overview of technology-related risks and opportunities, analyzes existing frameworks, and highlights that there is still no cross-sector and cross-business model framework or set of recommendations for investors.

The newly developed guidelines represent an initial approach to identifying, categorizing, evaluating, and mitigating ESG-related risks in technology investments. They offer suggestions on how investors can assess these issues and integrate them into existing investment processes.

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Job Quality – What determines a ‘good’ job? How can job quality be measured? How can strategic objectives be defined and integrated into an impact strategy?

The study illustrates the current state of knowledge on the topic and presents the results of a series of interviews with ESG and impact experts from peer institutions as well as investment managers from OeEB and DEG.

The Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) and the Development Bank of Austria (OeEB) continuously support clients in the creation of jobs in compliance with international labour standards. While momentum is building among development finance institutions and other investors who recognise the importance of quality jobs, challenges remain with regards to the complexity of the concept and its appropriate operationalisation. This study presents new insights into how Development Finance Institutions can contribute to assess and promote the job quality of their investments.

The study had two objectives: First, to develop a comprehensive conceptual framework for defining job quality, compatible with existing (international) concepts. This was done with the aim to build a common understanding of what constitutes job quality. Second, to further explore and prioritise job quality topics that are operationally feasible for Development Finance Institutions and their clients.

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The publication "Between Economic Growth and Climate Change: Supporting developing countries reach sustainable, climate-smart development" combines two of DEG's most important priorities: development effectiveness and the transformation towards climate neutrality.

The position paper represents a contribution to DEG's new strategy. Nathalie Spath and Tian Xia presented the opportunities and challenges arising from the upcoming transformation of the global economy towards climate neutrality for DFIs and thus for DEG.

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Job creation versus biodiversity? Does local income outweighs the negative environmental effects of a project? Most of the impact measurement systems in place today have an exclusive focus on the positive impacts, with negative aspects mostly considered under a risk perspective or as part of an ESG (Environmental, Social and Governance) assessment.

To explore the possibilities of approaching impact measurement from a net perspective, i.e., both incorporating positive and negative development impacts in one system, DEG and OeEB together with Syspons GmbH, conducted an “Exploratory Research Study on approaching DFIs Development Impacts from a Net Perspective".

The goals of this explorative study were:

• to expand the knowledge base and make the case for adopting a net-impact approach;
• to create awareness of the wider context of investments in relation to the Sustainable Development Goals (SDG);
• to provide options and building blocks for integrating net-impact in DFI operations and impact management.

A literature review, interviews with other DFIs, and in-depth analysis provided the initial foundation for the study. In a further step, individual sectors of particular relevance to OeEB and DEG were selected, on which the trade-offs of the individual SDGs in terms of their impacts (positive and negative) are shown. Both analyses are the basis for potential options for adapting impact measurement systems, as well as forward-looking recommendations for implementing a net-impact perspective.

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Closing the gender gap in economic participation and opportunity is not only “the right thing to do”, but also “the smart thing to do“. Gender-lens investing has become a key approach in the field of private sector investment to promote gender equality. This research study provides insights on how activities of DFIs and other investors can sustainably contribute to a transformation of root causes that perpetuate gender inequalities.

With a view to strengthening their efforts to promote gender equality, DEG and OeEB commissioned this research study on the transformative impact of gender-lens investing. A focus was placed on the role of women’s leadership as one aspect of women’s economic empowerment. The study encompasses a literature review, an assessment of DEG’s and OeEB’s investment portfolio performance on the 2X Challenge, exploratory interviews with experts in the field and three case studies with DEG and/or OeEB clients.

The study provides the following key recommendations. On the individual organizational level, it was found that women’s leadership can have positive effects on women’s economic empowerment if pre-conditions in four action areas are met: (1) Leadership commitment, (2) Equal opportunities, (3) Training and development and (4) Wellbeing, safety & work environment. In the cooperation between DFIs/Investors and clients, transformative effects on women’s leadership at client level can be achieved through the following approaches: (i) Be a role model; (ii) Move from minimum requirements to impact; (iii) Provide technical Assistance; and (iv) Networks, platforms & community.

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Literature Review (PDF, 1 MB, non-accessible)

Case Study Report on Kandeo Fund(PDF, 673 KB, non-accessible)

Case Study Report on UMKA(PDF, 392 KB, non-accessible)

Case Study Report on TBC Bank(PDF, 544 KB, non-accessible)