Rosy Khanna: Why did I decide to join Finance for Peace?  

I recently left the International Finance Corporation (IFC), the private sector arm of the World Bank, after a three-decade career in international development and impact investing, working across different sectors and across the globe, including in fragile and conflict-affected parts of Asia, Africa, Latin America and Emerging Europe.   

My last position at IFC was Director, Financial Institutions Group (FIG) for Asia Pacific, managing the investment, advisory and upstream business lines for 30 countries in the region. Prior to this, I held the same position for FIG Latin America. I also held key technical leadership positions, namely Chief Investment Officer and Chief Credit Officer, and led strategic assignments to create the advisory services program and establish the climate change funds practice, in addition to developing the blueprints for the digital banking and very small enterprise lending business lines.   

I have been interested in international peace and human rights throughout my career, since my work has focused primarily on inclusive finance including gender financing and climate financing, in particular for vulnerable communities across the global south. Most recently, I completed a United Nations Human Rights Council Training Program to understand human rights as they apply to inclusion and climate-related challenges. 

Leading Finance for Peace at a time when the number of conflicts globally has increased and funding for fragile and conflict-affected contexts has been steadily declining was greatly concerning to me. I was drawn to the role of Executive Director at Finance for Peace since it gave me the platform to influence the conversation on the economic development of fragile and conflict-affected contexts, an issue that is very close to my heart.  

I am confident that I can achieve success in leading Finance for Peace in its mission to create the systemic change necessary to introduce peace-responsive goals in development finance and grow peace-positive investments in fragile and conflict affected contexts globally. I am looking forward to working closely with Interpeace in this endeavour since they have the experience and market intelligence in conflict resolution and peacebuilding in addition to a presence on the ground, all of which are important for Finance for Peace to leverage and build upon. 

What motivates me? 

I knew from an early age that my future was in international development – I come from a family of development professionals and spent part of my growing up years in India and Tanzania. My father was an engineer who worked on ensuring that remote rural communities had access to safe drinking water and water to irrigate their farms. My mother was an educator who believed that everyone deserved an education and did whatever she could to enable this. My sisters, two of whom are doctors, spent time serving underprivileged communities to improve health outcomes. 

Finding solutions to development challenges energises me. I am motivated by the opportunity to contribute to positive change focused on unserved and underserved communities that need innovative, tailored and targeted solutions to get them out of the circle of poverty. I am also motivated by dynamic and forward-thinking teams that are able to make a credible business case for introducing dynamic new ways in which economic development can be achieved.  

I am very excited to start as the first Executive Director for Finance for Peace so I can be part of the journey to create a viable and thriving peace finance market in the world. 

Turning talk into reality: How Peace Finance benefits all 

I have worked in the responsible investment space, trying to focus investors’ attention on incorporating environmental, social and governance (ESG) risks into their investment processes, for well over a decade, long before ESG issues became mainstream. There is no doubt that there has been significant momentum, and that today most businesses and investors actively consider climate risks and opportunities and are increasingly integrating human rights issues into their processes.  

However, even though many actors in the private sector have made commitments to sustainability through the UN Sustainable Development Goals (SDGs) and the Paris Agreement, the reality is that none of these goals will be achieved unless capital flows from the global north to the global south. This is why I feel passionately about the role that Finance for Peace can play in developing the frameworks and that standard that will give investors the confidence required to shift capital to where it needs to go, and why I have accepted the role of inaugural Chair of the Finance for Peace Steering Committee. Without this shift in capital, our climate ambitions and the SDGs simply can’t be achieved. 

Today, 75% of the world’s extreme poor and SDG needs are in fragile and conflict-affected places. 1.9 billion people live in these countries and private sector capital alongside government investment is desperately needed. However, as it stands, little of this capital it is flowing where it is needed.  To enable capital flows, lower risks and create investment opportunities, we need new approaches, and this is why Finance for Peace has been established. A core part of the work of Finance for Peace will be to develop standards and frameworks that will assist investors, particularly bond issuers and equity funds, to invest in a way that enhances peace. We are currently consulting on frameworks for peace-aligned investment through our Peace Finance Impact Framework which includes a Peace Bond Standard and a Peace Equity Standard

We believe that Peace Finance approaches can lower risk for communities and for investors, in ways that are bankable. This provides investment opportunities, which is important given that developing and emerging economies are some of the fastest growing in the world. Peace Finance is a way of opening these markets for investors, in manner that is fair and impactful for local communities. 

The United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2023 finds that developing countries face a widening annual investment deficit as they work to achieve the SDGs by 2030. The gap has grown to approximately USD 4 trillion per year, up from USD 2.5 trillion in 2015 when the SDGs were adopted. The report finds that global foreign direct investment fell 12% in 2022, and while allocation to SDG-investment sectors such as renewables has nearly tripled since 2015, the lion’s share of the money has gone to developed countries. 

Let’s look at the numbers available from 2021: If only 1% of global issuance in sustainable investment categories that year had been aligned with the Peace Finance Standard and Impact Framework, more than USD 16 billion of peace-enhancing finance would have been generated. This would be equal to a 60% boost of foreign direct investment into fragile and conflict-affected settings from 2020 levels, or four times total global food aid spending in 2021.  

To begin boosting that foreign direct investment, as an immediate next step we have just employed our first Executive Director who will start in the role in late September. We are also forming a Steering Committee and a Peace Finance Standards Committee. Applications for the Standards Committee are open, both from the investor world and the peacebuilding community. In the coming months, we are also launching an industry body to help educate, inform and catalyse the private sector. We hope you will get involved. 

For too long, the need for capital in the developing world has been discussed, but not actioned at the scale required, and our aim is to turn that talk into reality. No one is pretending it will be easy, far from it, but we believe this is the right approach to begin to move the dial. 

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