The Russian war: impact on impact

Rene Wienholtz
6 min readMar 23, 2022


A wall with a hole, presenting a view to a tree
Will there be damage to the impact investing trend due to the new crisis?

Since the end of February, the world has been ticking differently. A nuclear weapons armed country has attacked a legitimate and democratic nation and, as a result, triggered a new global (hopefully only) Cold War with armament, deterrence and far-reaching economic consequences.

Much has already been written about the dramatic humanitarian situation in Ukraine and the overall global economic impact. However, from my perspective, as the founder of LOOM Impact, an impact finance boutique focused on the UN’s Sustainable Development Goals (SDGs), other questions arise in detail.

Impact investing status quo

In the last 3–4 years in particular, a lot has happened in the segment of impact-oriented financing projects. Be it new impact funds/bonds or other impact-linked finance vehicles — the segment of SDG-focused projects grew significantly. Compared to the “big” funds of the rest of the financial world, these are all rather small plants, but the hoped-for momentum finally emerged.

This was based on the fairly stable situation of the global economy and individuals in the industrialized nations. The 2008 financial crisis had been overcome and, despite the Corona lockdowns imposed in 2020, a recovery, even a soaring of the markets, was evident toward the end of the year.

Even more — despite, or perhaps because of the pandemic, the issue of action against climate change, turning away from factory farming, gender equality etc. did not fall behind, as initially assumed, but was strengthened. A small virus figuratively put us all in the same boat within a very short time and made us realize how small & fragile the world is and how closely we are all connected.

Quo vadis

Now that the last CoViD-related restrictions are slowly falling in Europe, there was confidence that the impact economy would become stronger than ever and move out of the current niche of the investment space and into the mainstream. Then came Russia’s war against Ukraine and now everything is different.

Once again, foresight beyond generational boundaries is giving way to a focus on the acute and the urgent. Security, health, supply and democracy are in danger. Who is still thinking about projects to promote gender equality in African enterprises when we here in Europe urgently need to get rid of Russian gas and oil?

The “impact” of the missiles & gunfire in Ukraine has a possibly also long-term effect on the impact economy. Certainly — but to what extent?

Right off the bat, I’m sure that in the medium and even short term, SDG-oriented projects will get a boost. Still, there will be a shift in priorities within the 17 fields of the Sustainable Development Goals. So soon after the start of the war and sanctions, predictions are always a vague glimpse into the crystal ball — but I’ll try my hand at a forecast anyway.

2 dimensions: ecological & social impact

To keep it pragmatic and not too sophisticated, I look at two dimensions of impact-oriented projects. The first dimension is that of environmental versus social challenges. Reading the governmental publications from various countries of the EU, it is clear: we need to move faster in sustainable energy production for eliminating the use of fossil fuels.

Apart from the tale of “green nuclear power” and “gas as a bridging technology”, this ultimately means a huge plus for energy projects from renewable sources and the willingness to direct funds in this direction. This also serves target areas of the SDGs (7: Affordable & Clean Energy / 13: Climate Action). The urgency triggered by the new crisis provides these issues with a further significant gain in traction.

The same certainly applies to the topic of “new mobility” (addressed in SDG fields 9, 11 & 13). Most of the transportation is also based on fossil fuels. And not only the step towards e-cars is meant here — also turning away from personally owned cars, towards the sharing economy and public transport, which needs to be significantly expanded.

It should be noted that the dimension of ecological projects, particularly in the energy and mobility sector, will be strengthened, especially because of the Russian crisis. The more local sourcing of raw materials and food, and thus also the lower footprint of transports for these, will also have a positive effect.

But within this dimension, what about the more social/societal projects? Here comes my first fear, because this is just not as urgent as independence from oil & gas. Precisely because the social challenges in the SDGs never seem acute, it is hard to believe that scarce discretionary funds will be channeled into these projects. Ventures for gender equality, education, democracy promotion… all these will probably have a harder time in funding in the coming years.

Regionally close impact vs. impact in developing countries

In addition to the first dimension (eco vs. social), there is also the second dimension of regionality (near vs. far). Here, too, there will be shifts in the allocation of funds. To put it simply: if “my” money in Europe can have a positive effect as “freedom energy” (quote of the German Minister of Finance, Mr. Lindner) by financing solar parks, hydropower plants & wind turbines, then why invest in the rural solar electrification of remote areas in Africa? This is possibly riskier and further away from me.

So, the thesis is: in all likelihood, financing projects that are e.g. in the global south will not become easier, because from the narrative it is now possible to achieve impact with the financing of EU eco-electricity & new mobility needs. Across both dimensions I can summarize:

Dimension 1:
eco (electricity/mobility) ++ / social (equality, education etc.) -

Dimension 2:
near (e.g. EU) + / far (e.g. global south) -

The above summary falls surely quite short and is rather more striking than a complex assessment. I do not assume that already existing projects will be financed less or that there will be no new projects of this kind. It will only be more difficult to acquire new money for impact investing in social and/or developing country oriented projects in the coming years.

Is financing the so called „freedom energy“ still impact investing?

But now I come to the last and probably crucial topic: what is impact investing in these times? Everyone who has dealt with this question has been presented with different definitions and opinions in dozens of sources, so I won’t try a new interpretation here. But I will summarize it crisply from my point of view:

Impact investing is when I invest my money in ventures that not only address at least one field from the SDGs, but also would have little chance of being funded by non-impact investors. Impact investing actually means “investing where hardly anyone else would have invested”. Or to say it with Star Trek: “…to boldly go where no (wo)man has gone before”. ;)

So, is it impact investing, when we’re financing e.g. wind power plants in the EU, because it generates the politically pushed “freedom energy” that fits to the SDGs 7 & 13? From my point of view: mainly, no. Because in the end, so much new money from ESG funds and possibly also government funding pots will be attracted to this topic that no visionary impact investor is needed.

On the other hand, financing entrepreneurs for agricultural projects in developing countries or investing in off-grid water & power infrastructure in Africa — this not only serves various SDG fields but also has an impact in areas where even small changes trigger a large, multi-layered effect. At least from my perspective, this is impact investing par excellence. Perhaps now more than ever, as free cash will become scarcer over the next few years and the aforementioned focus on financing the energy & mobility transition in the EU will also attract a lot of liquidity.

Appeal & outlook: do not lose focus on “real” impact

What remains last is my outlook: Impact investing not only survived the Corona crisis but emerged from it stronger. Presumably, the new Cold War will delay the leap of these impact-oriented financial instruments into the mainstream of the financial markets — but impact investing projects will not fail.

My appeal: especially in these times, there is a need for energetic impact investors who are aware of the impact of their money and do not take the easy way of the “EU eco-electricity” hype but look for attractive projects that unfold their impact in regions that are now even more disadvantaged or take up issues outside the mainstream topics.

If we manage over time to further eradicate the economic, social & ecological imbalance in this world, then hopefully one thing will be achieved and not only in Ukraine: peace.



Rene Wienholtz

Impact investor & owner of the Berlin-based LOOM Impact AG — an impact finance boutique / former CTO of STRATO / entrepreneur & electronic music producer…