Community conflict can have significant impacts on business operations in emerging markets. Operational interruptions triggered by conflict cost time and money, and possibly even forgone investment opportunities. Communities often need technical support to access and understand information, deliberate collectively, and participate in investment-related processes as an empowered counterparty.
Businesses have an important role to play in financing community support, but care is needed to make sure legal and technical support for communities remains independent. An independently administered pooled fund for responsible investment may be a promising innovation to address this need. A pooled fund can receive contributions from companies, financial institutions, impact investors, and other private sector actors, among others. Philanthropic and aid donors can also contribute funds—to help establish the fund itself or as a contribution to the collection of funds held by the pooled fund, or both.
Goal and discussion questions
In this interactive roundabout session, participants will share their experiences in engaging communities and protecting their rights in the context of resource investment. They will discuss the feasibility of a basket fund and identify key design considerations.
Discussion questions could include:
- How do you, your asset managers and/or portfolio companies assess the social and environmental risk of a project? How do you assess land tenure risks, for example, and secure Free Prior and Informed Consent?
- How do you, your asset managers and/or portfolio companies monitor the human rights and environmental impact of a project?
- How do you engage the affected communities prior to and during investment? How do you resolve disputes with communities?
- How might COVID-19 affect your due diligence, risk analysis, and community engagement practices?
- What role can investors play in promoting meaningful community engagement and responsible business practices?
- How might a pooled fund for independent community support address your needs as an investor? What are some key design considerations and objectives?
This session is intended for those with experience or interest in responsible investment in emerging markets. In particular, we look forward to connecting with philanthropies, impact investors, financial institutions, and businesses who hold or are considering investments in the following areas:
- Renewable energy
Session format: roundabout
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