Strategic Impact Targets

The primary purpose of BIO’s Theory of Change (ToC) is to provide external stakeholders with a better understanding of BIO’s activities and ultimate contribution to the SDGs.

The ToC 2024-2028 integrates the Strategic Impact Targets (SITs) within the description of the outputs (tangible, immediate effects that result from the activities that are undertaken). Outputs fall within BIO’s sphere of control, unlike outcomes and ultimate impact, that rather fall within BIO’s scope of influence.

Theory of Change

Strategic Impact Framework

Ex-ante targets (except SIT 10 BDSF)

Investment project contribution to a SIT (except SIT 10 BDSF) is determined based on information about SIT related current or expected outcomes before final approval by BIO Investment Committee.

Not mutually exclusive and no strict requirements

An investment project may target several SITs at the same time (including within pillars) and there is no provision regarding the nature or number of SITs to be targeted by a specific investment.

Target on total cumulative commitments over 2024-2028

SIT contribution is tracked at commitment level corresponding to investment project approval by BIO’s Investment Committee and SIT target relates to the total cumulative amount committed over the 5 years of the management contract (from 2024 to 2028 included). While SIT contribution and related achievements will be tracked on a regular basis, the final performance against SITs will only be available at the end of the Management Contract.

Sector specific criteria

SIT relies on a set of SIT specific eligibility criteria - both materiality and intentionality criteria - that often vary across clusters (financial institutions, investment funds or project finance) and/or sectors.

Compatible with lean data approach

Assessment of an investment project contribution to SITs relies on a predefined and limited set of SIT specific information related to company’s (target) activity and/or investment focus (or equivalently use of funds).

Applicable at project and total commitment level

SIT contribution will be systematically assessed at project level and then aggregated at commitment level.

Annual progress report

Progress towards SITs will be comprehensively described as part of the annual and systematic assessment of BIO’s overall impact performance, with a focus on contribution of new commitments to SITs.

Possible revision/update of targets

Targets can be adapted at mid-term (year 3) based on a joint decision of BIO and DGD, and with the explicit approval of government member in charge of BIO.

Strategic Impact Targets (SITs)

Basic criteria rationale

MATERIALITY = Significance of a SIT-related topic in the activity of the company and/or the purpose of the investment project
INTENTIONALITY = Deliberate and purposeful incorporation of a SIT-related topic within the company activities

SIT 1: Job creation

Projects contributing to a considerable increase in jobs or economic activity

By strategically targeting investment projects with high job creation potential and a strong emphasis on job quality, BIO can become a pivotal force in driving inclusive and sustainable job creation, thereby directly tackling poverty reduction by empowering individuals and communities with income generating opportunities. It also fosters a more equitable and stable society by ensuring these jobs are decent and providing a pathway for upward social mobility.

SIT 2: SME finance

Projects contributing to access to financing, and to bank, insurance and other financial services for SMEs

SMEs access to adequate financial services like funding, banking, and insurance, is crucial because SMEs are key drivers of job creation, innovation, and overall GDP growth. Overcoming traditional financing hurdles faced by SMEs helps unlock their potential and contribute to a more stable, relevant financial system that benefits the entire economy.

SIT 3: Microfinance

Projects contributing to access to financing, and to bank, insurance and other financial services for micro enterprises and private persons

Investing in microfinance and expanding access to financial services for underserved populations are vital for promoting financial inclusion and reducing poverty, empowering individuals and small businesses to participate in the economy. This should create opportunities for economic growth and resilience, fostering inclusive development and reducing inequalities at the grassroots level.

SIT 4: Least Developed Countries and Fragile & Conflict Affected Situations

Projects contributing to reducing inequalities among countries

Targeting least developed countries (LDCs) and addressing inequality among nations implies channelling resources where they are most needed, helping to bridge development gaps, and promoting equitable opportunities, while building stronger, more resilient global economies where all countries can thrive and progress together.

SIT 5: Inclusive Business

Projects contributing to reducing inequalities in countries

By bridging gaps and providing equal opportunities across different socioeconomic groups, inclusive businesses can foster an environment where everyone can contribute to and benefit from economic progress. This inclusive approach leads to more resilient economies, enhances social cohesion, and paves the way for comprehensive development that leaves no one behind.

SIT 6: Gender equality

Projects contributing to gender equality

Gender equality is not only a human right – it is a powerful lever for strong, green and inclusive economic development. Economies are more resilient and productive when they reduce gender inequalities, strengthen women’s rights, and support their equal participation in all spheres of life. Gender lens investing is crucial as it promotes gender equality, enhances economic empowerment for women, and leads to more sustainable and inclusive economic growth by recognizing and addressing the unique challenges and opportunities faced by women.

SIT 7: Climate finance

Projects contributing to the fight against climate change and climate adaptation as main target

Acting to fight climate change is one of the global challenges of our time to protect well-being and economic prosperity in all regions and sectors. One of the priorities for BIO is to provide funding for private entrepreneurs who contribute to reducing carbon emissions and to building climate resilience. Typical examples of eligible projects include renewable energy, energy efficiency, sustainable agriculture or innovative low-carbon and circular industries and infrastructures. Such investments are key to both lessen the impact on local economies and prepare developing countries to face physical impacts of climate change.

SIT 8: Climate adaptation

Projects contributing to climate adaptation as important goal

Developing countries are particularly vulnerable to climate change impacts (such as droughts, water stress, floods or wildfires), especially within sectors such as agriculture and infrastructures. Another priority for BIO is therefore to mainstream actions to support climate adaptation and support climate resilience with its clients and their broader value chain.

SIT 9: Ecological sustainability

Projects contributing to maintaining biodiversity and sustainably managed natural resources

Developing countries are also facing important challenges regarding biodiversity preservation and sustainable use of natural resources. In line with SIT-8, BIO will also aim to mainstream actions to reduce nature loss and promote ecological sustainability with its clients and their broader value chain. Those actions will support local economies to reduce their negative impacts but also benefit from efficiency opportunities and innovative business models such as those using eco-friendly inputs or circular economy principles.

SIT 10: Business development support

Projects to which BIO attributes technical assistance

Providing technical assistance to investees enhances capacity building, ensuring that investees develop the necessary skills and knowledge to manage their projects effectively and sustainably. It also fosters innovation by introducing best practices and advanced technologies that investees might not otherwise have access to.