Our Impact & ESG Approach
Theory of Change
With every investment, Beacon works towards advancing women’s economic empowerment in Southeast Asia and supporting the sustainable growth and resilience of SMEs.
In turn, our portfolio companies contribute to improved livelihoods for their employees, customers, and other stakeholders – and in many instances, enhanced environmental health. We are proud to be a catalyst for these businesses’ growth, which in turn empowers thousands of people in Southeast Asia.
This theory of change guides the type of data and information we collect and analyse at the fund level and for each individual company.
Our Theory of Change
Problem Statement
Only 10-20% of women-owned, women-led SMEs in Southeast Asia are able to access formal financing that meets their needs.1 While an increasing amount of venture capital and private equity is being raised and deployed in Southeast Asia, such funding is only suitable for a narrow set of high-growth companies with exit ambitions. Other companies – even if they are profitable, cash-flow-positive businesses growing at healthy rates – are often overlooked. While debt can often be a better fit for such companies, banks in the region typically have a conservative lending approach highly focused on collateral. As for private debt, there are only a handful of active private debt funds in Southeast Asia targeting SMEs. Furthermore, very few of these actors have an explicit focus on gender. These factors have led to an estimated USD 32+ billion financing gap for women-owned, women-led businesses in Vietnam, Indonesia and the Philippines.2
Activities
- Provide appropriate capital (predominantly debt) to SMEs led by women and gender-diverse teams in SEA.
- Provide capability building and value-addition support (including technical assistance, impact roadmaps) to our investees.
- Consistently apply a gender lens in all aspects of our work.
Outputs
Beacon’s investees:
- Access needed capital, allowing them to invest in the sustainable growth of their businesses
- Can build their credit history as well as capabilities to work with other investors and lenders
- Are supported in pursuing their social, gender, and environmental goals
Outcomes
- An improved experience for SMEs led by women and gender-diverse teams seeking and receiving investment
- Strengthened investment case for GLI, particularly investment strategies focused on SMEs led by women and gender-diverse teams in emerging markets
- Increased recognition of alternative models of entrepreneurial success focused on sustainable and profitable growth
Impact
- Advanced women’s economic empowerment in SEA
- Improved strength and resilience of SMEs
- Improved livelihoods and environmental health
- Increased awareness of gender equality and responsible practices
Indicators
- # of businesses led by women and gender-diverse teams invested in by Beacon
- # of businesses led by women and gender-diverse teams accessing institutional capital for first time
- Amount of capital deployed in businesses led by women and gender-diverse teams – by Beacon as well as co-investors and follow-on investors
- # of jobs sustained / created, split by gender
- Customer satisfaction and advocacy (NPS) of entrepreneurs
- Database on gender, social and environmental impact and financial performance of Beacon’s portfolio
1MSME Finance Gap. IFC SME Finance Forum.
2MSME Finance Gap. IFC SME Finance Forum.
Impact Management & Measurement
For each portfolio company, we gather gender, social, environmental, and financial data aligned with the IRIS+ system and the 2X Criteria. Our goal is to see how women’s empowerment, social and environmental impact, and financial performance connect with one another. Because we work across diverse sectors, the specific metrics may vary, but every measure follows these recognised standards.
We believe in measuring what matters and focusing on impact that lasts.
*Qualification under the 2X Criteria now requires all investees to meet the minimum requirements for basic 2X ESG, Governance & Accountability and at least 1 Criterion, and provide a formal, time-bound commitment to meeting another criterion.
Impact Roadmaps
Starting from 2024, Beacon Fund partnered with our portfolio companies to develop Impact Roadmaps – actionable plans outlining clear strategies and commitments to enhance their impact across multiple dimensions over multi-year timeframes. These Impact Roadmaps help our portfolio approach impact more intentionally and track their progress in a more structured, transparent way.
ESG Approach
At Beacon, ESG isn’t a box-ticking exercise. From initial assessment to post-investment support, ESG factors are embedded in our process. We have developed sector-specific ESG tools based on global standards such as SASB and 2X Criteria – tailored to SMEs and the local context – to evaluate opportunities, build awareness, and monitor portfolio companies. Recognising that many SMEs may not yet have rigorous ESG practices or full awareness of ESG issues, we balance enforcing minimum standards with a practical, supportive approach that helps companies strengthen their ESG performance over time.
