Request for Proposals – Research support for Peace Impact and Standards Lab

Location: Remote

Application closing: 22 June 2022

Finance for Peace Initiative – Peace Impact and Standards Research

A.  About the Initiative and wider project

The Finance for Peace Initiative is part of Interpeace’s five-year 2021-2026 strategy which calls for Interpeace to seek systemic change in how peacebuilding is financed and how private and public economic development supports peace. This is partly a response to a widely understood series of system problems in peacebuilding whereby interventions are too often not deployed at adequate scale, not effectively sequenced with economic development actions and too short term. This recognizes the significant role private sector actors have in fragile and post-conflict settings and how livelihood and resource competition issues impact many of the conflict dynamics we work on. Private actors that do not deploy their resources and investments in fragile and conflict affected places in conflict sensitive ways can exacerbate conflict dynamics and increase the risk to their own investments undermining future development prospects. Conversely, private actors that operate in peace responsive ways can potentially contribute to peace and lower the risks attached to their investments by increasing community ownership, trust and better meeting local needs.

At a higher and more systemic policy level, it is also important to recognize Foreign Direct Investment (FDI) is a significant component of the financial flows into fragile settings, exceeding Official Development Assistance for most of the last ten years until Covid-19. How conflict sensitive, and peace responsive these flows are, can be highly consequential for peace and yet much international peacebuilding action and response remains disconnected from the role, activities and approaches of private actors. Further, the growth of new ESG, SDG and Impact investing approaches provides significant opportunity for increasing peace responsive private investment, yet existing frameworks are not adequately tailored to realizing peace impacts and/or improving conflict sensitivity.

The Finance for Peace Initiative is supported by the German Federal Foreign Office (GFFO) and builds on feasibility research supported by the UK Foreign and Commonwealth Development Office (FCDO) on a new sustainable investment category developed by Interpeace called peace bonds. Over the course of 2022, the initiative will start by establishing a Peace Impact Lab and Peace Standards Lab to start a process of harmonizing metrics, norms, guidance and standards on how the private sector can positively impact peace. These are critical pillars of knowledge and guidance required to grow the market for peace finance in ways that are conflict sensitive and potentially peace responsive. Concurrently, the initiative will scale up to develop new partnerships, market intelligence, political and technical support across a diverse array of actors including DFIs, Donors, researchers, scholars, peacebuilding and civil society organizations, as well as the finance sector to develop supporting market infrastructure and knowledge to scale peace responsive private sector activity. This assignment will inform key research that will be presented at G7 meetings with key partners in Q3 2022 which will be aimed at further embedding technical and political support for scaling peace finance.

B.  Conceptual background to the assignment

In order to catalyse a broader market for peace enhancing investment certain key market infrastructure is required. Most fundamentally, a viable market for peace finance requires at least two things (1) a wide, market-recognised framework as well as set of standards and related benchmark metrics that can be used by investors to establish credible peace impacts, (2) a pipeline of investments that can fill significant demand for investments that achieve peace impacts. This research aims to significantly support the first issue relating to market recognised frameworks as well as standards and impact metrics.

A significant conceptual issue that needs to be clearly resolved in this research is the distinction between how private investors and business understand, measure and monitor ‘ESG’ and ‘impact’ concepts versus how development, peace and donor actors understand impact. Typically, the ESG frameworks that DFIs, banks, ESG-regulatory bodies/norm setters, investors and finance actors use tend to focus on internal practises of a specific company or investment some of which may or may not relate to actual wider social or community impacts. Many of these frameworks seek to measure the extent of these ‘ESG factors’ through the lens of risk, but specifically related to the company’s operations or its investments in a direct area of operations. Some of these factors evidently can have wider social or community impacts[1], but generally speaking are highly generic, non-context specific and/or not relevant to what peace and/or social cohesion in the given context requires.

Conversely, for humanitarian, development and peacebuilding actors, related government donors and wider civil society actors concerned with peace finance, many of these ESG and impact frameworks inadequately take account of the wider social, community and political impacts of a given project or investments. For these actors, ‘impact’ has a different and more maximal meaning, which is concerned with whether a project, investment or action has direct and indirect consequences for a higher-level objective. In the case of peace, this can carry highly specific meaning related to both peace writ-large as well as capacities for sustainable peace of a particular community or region.

Because of the ESG focus on company operations, ESG compliance can be seen a yet another regulatory or fiduciary transaction cost for businesses seeking to conduct operations in developing or conflict affected settings. While there is evidently an important do-no-harm regulatory function of such frameworks, there is also a need to engage businesses in the development of fit-for-purpose frameworks that can demonstrably mitigate direct risks to their operations. Thus, it is necessary to identify a framework that can adequately identify and align both community and company risks equally, ensuring relevance, credibility and feasibility.

Currently, there is no global benchmark for understanding, monitoring and measuring peace impacts from business investment. Similarly, while there are a multitude of metrics, methodological experience and applied learning from the peacebuilding and development sectors on impacting peace factors, there is not much prevailing guidance of how to apply this knowledge or practise to business activity. Further, there is a need to develop models and approaches that can show how ongoing, continuous and intentional engagement and monitoring of peace factors is in the interest of all actors and an important risk mitigant for business activity.[2]

C.  Description of the Assignment

This Terms of Reference is for core research support for two reports (1) the Peace Finance Impact report (tentative title) and (2) Peace Finance Standards Report (tentative title). The structure of both reports is outlined below. Both reports are intended to catalyse a discussion on standards/impact frameworks for peace that can be used independently or adopted by other standards/impact frameworks and be iterated over time as the market for peace finance further develops.

The support research will support research in four key areas:

  1. Task area 1: Mapping existing ESG/SDG and Impact frameworks. Map the universe of related standards frameworks relating to ESG, SDG and Impact investment, and summarise existing peace related criteria across existing frameworks and likewise identify gaps related to conflict sensitivity, peace responsiveness and peace impacts in existing frameworks.
    • Review existing DFI, UN and other efforts to catalyse concessional finance related to peace issues, identifying key gaps and areas of complementarity that can be built on or replicated. Sources should include and not be limited to:
      • DFI Working Group outputs on Blended Concessional Finance
      • OECD Blended Finance Guidance Note
      • IFC Environmental and Social Performance Standards
      • The Principles for Responsible Investing initiative
      • UN Global Compact ‘SDG 16 Business Framework: Transformational Governance’
  • Review existing and recent efforts to conceptualise peace impact frameworks, including and not limited to:
    • The GFFO supported Lion’s head report on peace positive frameworks
    • The Interpeace, feasibility study on peace bonds and ‘marking the market for peace’ research
    • The PDI, ESG+P framework
    • The Blue Peace initiative investment framework
  1. Task Area 2. Conceptual guidance for the Peace Impact Framework. Provide conceptual guidance for a peace positive, or peace responsive investment framework that can be shared more broadly for further review in the peace impact lab process. This should be based on the mapping process and conceptual aspects described in this ToR.
  2. Task Area 3. Peace Impact Metrics. Develop baseline indicative peace impact metrics based on the peace impact framework. This would likely fall into two categories, (1) generalised thematic metrics that can be used transversally across different investment thematic and sectors, (2) sector specific metrics that are particularly relevant and/or salient to peace impacts for specific sectors. Connected to this would be a recommended methodologies or approaches that could be taken to measure given phenomena.
  3. Task Area 4. Peace Standards Development. Input into articulation of an indicative set of standards that can pertain to new categories of sustainable investment in peace, such as peace bonds, peace equity and enterprises seeking peace impact. Building on similar standards frameworks such as the ICMA Green Bond and Social Bond standards as well as the SDG Impact SDG Bond/Equity/Enterprise standards, outline:
    • Peace Bond Standards
    • Peace Equity Standards
    • Peace Enterprise Standards
    • Provide explicit exclusionary criteria for peace finance or investments

Process and overview

There will be two main pieces of research delivered in time for a G7 technical meeting in October 2022.

  1. Peace Finance Impact Report, detailing:
    1. A systemic review / summary of what we know about private sector impacts on peace and conflict.
    2. An indicative peace impact framework outlining a conceptual framework for defining peace impacts.
    3. Indicative peace impact metrics. It is envisaged this would fall into two categories, generalised metrics and sector specific metrics.
    4. Peace impact measurement methods. Some overview of potential methods that could be deployed to measure the abovementioned peace impact framework and impact metrics
  2. Peace Finance Standards Report, detailing:
    1. Explicit detail indicative standards for key categories of peace finance, including draft principles and standards for peace bonds, peace equity and for enterprises seeking peace impact.
    2. Explicitly detail exclusionary criteria for Peace Finance. i.e. Non-eligible forms of investment related to peace based on above logic, i.e. weapons manufacture.

A steering committee for the Finance for Peace Initiative will be composed of staff from Interpeace and the GFFO and will also provide feedback and direction to the researcher(s). The researcher/s will work closely with the Interpeace Head of Research as well as support staff to develop the two report.

The Peace Standards Lab and Peace Impact Labs are multistakeholder consultation and engagement platforms that seek to:

  • Consult and engage with investors, DFIs, Government Donors, standard settings organisations, peacebuilders and development actors on fit-for-purpose standards to help companies and investors align to trusted and recognised standards that help realise peace.
  • Develop draft standards for new categories of peace related investment, such as peace bonds, peace equity and for enterprises seeking peace impact. Define basic exclusionary criteria for aforementioned categories of peace finance.
  • Where possible, work with partners to seed the Peace Standards into other larger impact, ESG/SDG frameworks as well as Green, Social and Sustainable Bond frameworks that already exist.
  • Develop reports in Q3 of 2022 detailing a draft standards framework for further discussion, iteration and feedback.

Objectives and Scope of the Assignment

As described above, there are four key task areas that would likely need to be carried out by more than one researcher. While they should all inform each other and should also build on separate more scholarly research being conducting on reviewing the impacts of private sector activity on peace, task areas 1 and 4 are closely related and task areas 2 and 3 are closely related. It is envisaged, the research process will be iterative with regular exchanges with the Interpeace research team and Finance for Peace steering committee. The researchers would join bilateral or group exchanges with peace impact and peace standards lab meetings and make contributions and input as required.

Task area 1: Mapping existing ESG/SDG and Impact frameworks, key deliverables:

  • Comprehensive literature review of existing ESG/SDG and Impact frameworks. Full reference list, and a summary review of the major frameworks and their peace relevance. This would likely focus on social component of ESG and also review relevance of important process oriented frameworks pertaining to community engagement, stakeholder engagement and do-no-harm. Identify clear list of key organisations to engage from industry whether norm setting, validation, regulation, advisory, key large ESG investors, DFIs, MDBs.
  • Review major verification regimes, how they work and how peace criteria could be subsumed into larger frameworks.
  • Summary analysis of their complementarity and gaps and where the Peace Finance Impact and Standards need to fill.

Task Area 2. Conceptual guidance for the Peace Impact Framework, key deliverables:

  • Develop, with close input from Interpeace, an indicative peace impact framework outlining a conceptual framework for defining peace impacts. Draw from other impact frameworks in Gender and Climate a framework that would make sense to investors but evidently tailored to peace.
    • It is envisaged this would define, fundamentally, what a peace impact could be defined as. It would build on existing work by various actors and specifically the Interpeace feasibility study work on peace bonds. This could follow the well used capital ‘p’ and lower case ‘p’ and negative/positive peace distinctions used by International development and humanitarian actors to conceptualise their peace impact approaches.
    • The conceptual work would visualise a framework for easy communication to outside actors.

Task Area 3. Peace Impact Metrics

  • Develop a core set of generalised thematic metrics that can be used transversally across different investment thematic and sectors.
  • Develop a sector specific taxonomy based on commonly used industry sectors. Then, under this taxonomy develop general metrics that may have a more specific sectoral application and/or relevance. i.e. for extractive industries/and or primary industries, benefit sharing metrics may be more relevant and sector specific (further: % of communities receiving low cost electricity from a solar/wind/hydro/geothermal project)
  • Provide a review and summary of recommended methodologies and approaches that could be taken to measure peace impacts over the life cycle of an investment.

Task Area 4. Peace Standards Development

Based on existing standards frameworks, such as the ICMA Social and Green bonds standards, and/or SDG Impact Standards, develop indicative standards for Peace in the following areas:

  • Draft Peace Bond Standards
  • Draft Peace Equity Standards
  • Draft Peace Enterprise Standards
    • Note: these standards will be highly similar, the research should clearly and simply identify what would be key points of difference for bonds, equity and enterprise investments
  • Draft Exclusionary criteria for peace investments.

Timeframe and Deliverables

  • Commence 15 June, kick-off meetings with Interpeace research lead
  • First draft inputs on relevant deliverables by 13 July
  • Second draft on relevant deliverables by 10 August
  • Final deliverables by 26 August
F. Reporting and feedback

The input report is to be developed in an interactive and iterative process with Interpeace and the Steering committee of the Finance for Peace initiative. The researcher will work closely with and report to Daniel Hyslop, Head of Research and Senior Peacebuilding Advisor.

  1. Budget

The full-time number of work days for the above dates is 52 work days. Daily rate to be determined based on researcher experience.

How to apply:

  • Provide a maximum two-page proposal with a description on how you would complete the assignment
  • Present a financial bid for this tender in US dollars, including a daily rate. 
  • Provide attached CV that proves relevant experience

We will review the applications both on the technical and financial content and value for money. Deadline for applications is 22 June 2022, selection. Applications can be sent to hyslop@interpeace.org.

[1] i.e. a gender responsive employment policy in a particular project or investment can link to wider positive social or community impacts. But whether such as employment policy contributes to peace is entirely dependent on how such impacts are sought, who actually benefits (i.e. intersectional identities beyond gender may be consequential for cohesion) and over what time period (i.e. are such policies done with sustainability in mind or are they only effective in one time period, say initial project implementation but not thereafter).

[2] From Lions’ Head report – ‘Investing for Peace’: “Assessing and maximising peace impact is not, therefore, a one-off exercise in ex ante appraisal, but a continuous, intentional process of engagement, mediation, and consensus building among and between private sector businesses and stakeholders affected by their actions, which yields a measurable ex post effect. Where, how, and by whom investments are made matters at least as much as what investments are made.”