ESG Investing

How Are Impact Investors Supporting Refugees?


Forced displacement and migration is on the rise, both in terms of people displaced within a country and refugees who are compelled to cross borders. Factors such as war, violence, and climate change all contribute to displacement. Although generally migrants have been shown to contribute to economic growth in their destination countries, some forced migrants may lack the support needed to achieve secure livelihoods—particularly because most “self-settle” in cities, whereas managed camps that provide services house only a minority of displaced people.

A growing number of impact investors have begun to back initiatives that benefit forced migrants. They hope to mitigate the detrimental effects of displacement on affected communities and harness the creative potential of migrant entrepreneurs.

The Forced Displacement Crisis

There were 68.5 million forcibly displaced people as of the end of 2017, including 25.4 million refugees, according to the US-based arm of the UN Refugee Agency, USA for United Nations High Commissioner for Refugees (UNHCR). One out of every 110 people worldwide is either internally displaced, a refugee, or an asylum seeker. Nearly 31 million displaced persons are children, making up more than half of refugees worldwide.

Mercy Corps notes that five countries of origin account for two-thirds of refugees. The largest number originate in Syria: 6.3 million Syrians have fled their homeland following the war that began in March 2011. Conflict and instability in Afghanistan have caused another 2.6 million people to leave for their safety. In South Sudan, war, drought, and floods have forced 2.4 million people to travel to neighboring countries. In Myanmar, violence and ethnic persecution account for 1.2 million refugees, while another 986,400 refugees have fled war, drought, and flooding in Somalia. Other crises that have created refugees include violence in El Salvador, Guatemala, and Honduras; armed conflict and economic breakdown in the Central African Republic; and conflicts in Iraq, Yemen, and Ukraine.

Refugee Investment Network Founded to Support Refugees

The Refugee Investment Network (RIN) was founded in 2018 with the goal of mobilizing capital to benefit displaced people. In its work, the organization follows a three-pronged approach: it conducts research on refugee-supporting opportunities, facilitates investments in communities of displaced people, and engages in advocacy and promotes policies encouraging refugee investments.

RIN’s refugee lens refugee investments criteria helps identify projects that create sustainable opportunities that also promote economic growth and stability. The lens considers refugees in a broad sense and includes all who are forcibly displaced from a variety of causes. Refugee owned and led business may qualify if at least one senior management position is held by a refugee or the board is composed of at least 33% refugees. Refugee-supporting projects that provide infrastructure, services, or jobs to refugee communities are also eligible. Other investments may qualify if they protect human rights and refugees’ welfare across their supply chains.

Until recently, forced migrants have been largely overlooked by investors, but that may change as more individuals and institutions discover the growing field of refugee-supporting enterprises.

In its report Paradigm Shift: How Investment Can Unlock the Potential of Refugees, RIN highlights several opportunities that illustrate the potential of refugee-lens investing. One example is the Massachusetts Pathways to Economic Advancement Project. In partnership with the Jewish Vocational Service, this project plans to help about 2,000 immigrants and refugees in Boston over three years, providing services such as job search assistance and English classes. It also aims to increase economic advancement opportunities through a relationship with investors including ImpactAssets, the Inherent Foundation, and the Boston Impact Initiative Fund.

The report also features Women Entrepreneurs Opportunity Facility (WEOF), a project intended to create the first loan facility for women-owned small and medium enterprises. To date it has invested $1 billion in 26 countries, including conflict areas, to help 50,000 women entrepreneurs through the financial intermediaries it backs. The WEOF aims to benefit more than 100,000 women over 10 years. RIN is studying how WEOF’s blended finance model could be emulated to support refugees.

Other Organizations Mobilizing Capital to Help Displaced Communities

RIN’s list of organizations promoting impact investment in displaced communities continues to grow. Tent Partnership for Refugees, founded in 2016 by Hamdi Ulukaya with the purpose of encouraging businesses to hire and invest in refugees, continues to commission research, awards grants and help businesses identify opportunities to involve refugees. It points to its success with WeWork, which plans to hire 1,500 refugees over five years, and Pearson, which delivers math education through a pilot app to Syrian refugee children.

Impact investing network Mission Investors Exchange works with foundations targeting social and environmental change. It highlighted investing for migrants and refugees in its 2019 Mission Investing Institute, and published research and strategies on investing through a refugee lens. One member foundation, Denver Foundation, is investing in migrant communities through their Impact Investing Program which loaned $100,000 in 2018 to a nonprofit that provides business training and microloans to refugee entrepreneurs.

Until recently, forced migrants have been largely overlooked by investors, but that may change as more individuals and institutions discover the growing field of refugee-supporting enterprises. RIN’s report calls impact investors “the sleeping giants” who can connect refugee entrepreneurs to capital and bring hope to displaced communities.


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