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The dominant governance posture in impact finance where capital is constrained through exclusions, conditions, covenants, and reporting obligations designed to prevent misuse rather than enable purpose. The implicit logic is prohibitive: do not finance X, do not violate Y, demonstrate compliance with Z.
A climate fund defines impact through sector exclusions (no fossil fuels), ESG thresholds (minimum score 7/10), and quarterly reporting—all focused on what capital cannot do rather than what purpose it actively carries.
SF Section 2