To address ‘peace-washing,’ defense investments require a framework for measuring impact.

The article discusses the intersection of impact investing with Defense, Security, and Resilience (DSR), highlighting the growing capital flow into this sector, particularly in Europe. There’s an increasing trend among state-backed limited partners to include defense in their strategies because of evolving mandates and the quadrupling of deal volume in recent years.

Key Insights:

1. Emerging Fund Strategies:

   • Peace Finance Funds: These invest in companies in conflict-affected areas, aiming for resilience building. Examples include the Peace Invest and Aegis Peace Fund.
   • PeaceTech Funds: Focus on technology solutions for conflict prevention and peacekeeping. The establishment of firms like B Ventures showcases this trend.
   • Democracy and Freedom Funds: Support civil liberties and democratic governance. Notable funds include the Soros Economic Development Fund.
   • Resilience Funds: Invest in solutions to protect against risks, often as part of broader funding strategies. This category overlaps significantly with other themes.

2. Measuring Impact:

   • A common challenge is assessing the impact of defense and dual-use technologies. While some investment metrics are being developed, consistent measurement frameworks are lacking.
   • Concerns persist about reputational risks and regulatory challenges in labeling defense investments as “impactful.”

3. Future Directions:

   • The article identifies three critical agenda points for progress:
     • Market Analysis: Understanding investment opportunities and risks.
     • Impact Frameworks: Developing shared metrics and taxonomies for assessing outcomes.
     • Collaboration: Creating platforms to align investments with international standards and accountability measures.

Overall, the piece indicates that as conflicts grow, ensuring DSR investments contribute positively to peace and security is increasingly critical. It suggests a pressing need for frameworks and collaborations that can define and measure these investments effectively.

For further inquiries, Susan Winterberg of Reframe Venture is involved in these initiatives and can be contacted for detailed discussions and conferences related to this topic.