Finance for Peace initiative: Investor Guidance Development on Youth Peace Finance (Phase 1A)

A. About Finance for Peace

Finance for Peace works with partners to catalyse a market for peace-positive investment. We work collectively to create standards, market intelligence and partnerships across sectors to build trust, share knowledge and establish networks.

Through leveraging and creating new partnerships of on the ground community engagement and political support, Finance for Peace aims to scale what we call “Peace Finance” – investment that has an intentional and positive impact on peace while promoting economic development, job creation and better livelihoods. Peace-positive investment generates mutual benefits of reduced risks for investors and communities and can achieve both bankable and peaceful outcomes.

Peace-positive investment encompasses different asset classes such as Peace Bonds or Peace Equity or similar structures, across a range of sectors. In order for Peace Bonds and Peace-Equity like structures to take flight, we need commonly agreed standards and guidance that the market can trust and use, as well as new partnerships and knowledge.

Finance for Peace brings together investors, private sector actors, development finance institutions and other development actors, governments, peacebuilders, civil society and communities, to identify innovative solutions that can bring true additionality to investors, as well as more inclusive development.

Finance for Peace is supported by the German Federal Foreign Office (GFFO) and builds on feasibility research supported by the UK Foreign and Commonwealth Development Office (FCDO) on a new sustainable investment category called Peace Bonds. Finance for Peace has been incubated by Interpeace, an international peacebuilding organisation that has worked on conflict resolution and peacebuilding throughout Africa, the Middle East, Asia, Europe and Latin America for 30 years.

For more information on Interpeace or the Finance for Peace initiative, please see: https://www.interpeace.org/ and https://financeforpeace.org/.

B. About the partner: Investing and Partnering with Youth for Peace (IPYP)

Despite increasing recognition of the important roles young people play in peacebuilding, youth-led organisations face limited, inaccessible, unpredictable and inflexible funding. For example, it is estimated that 49% of youth-led organisations operate on less than USD 5,000 annually. Moreover, while data is limited, funder dialogues indicate that the demand and need for investments in young people’s role in peacebuilding is far beyond existing resources. Young people are rarely meaningfully involved in investment decisions and there is limited or no investor guidance for engaging with young people in a peacebuilding context.

Within this context, the Global Coalition for Youth Peace, and Security Financing Taskforce launched a working group to explore the role of the private sector in supporting the YPS agenda. The ‘Investing and Partnering with Youth for Peace’ (IPYP) purpose is twofold: (1) to identify, research and recommend potential options for additional resource mobilisation and partnerships with the private sector to advance the role of young people in peacebuilding; and (2) to mobilise resources and partnerships and help strengthen knowledge management and advocacy through coordination. IPYP is currently developing an innovation portfolio, with a pipeline of different private-sector partnerships and financing opportunities to advance the role of young people in peacebuilding.

For more information on IPYP see: https://cnxus.org/investing-partnering-youth-peace-ipyp/.

C. Project overview

The joint Finance for Peace – IPYP project will develop a normative understanding of Youth Peace Finance (YPF) (“the principles and taxonomy”) [Phase 1A] and how investors can meaningfully engage with young people (the “guidance”) [Phase 1B].

NOTE: These particular Terms of Reference relate to Phase 1A of the project only. For more information on Phase 1B, led by IPYP and generously supported by Robert Bosch Stiftung, see: https://www.daghammarskjold.se/wp-content/uploads/2024/05/ipyp-developing-investor-guidance-2024.pdf.

The objectives of the Phase 1 research are to:

1. Deliver a set of investment guidelines and a YPF principles and taxonomy, designed to prepare investors for identifying and engaging with youth-inclusive investment opportunities.
2. Develop and disseminate a comprehensive report that analyses selected case studies to showcase effective Youth Peace Finance mechanisms and their impact, enhancing the investor community’s understanding of YPF.
3. Develop and support the development of a training programme for investors on utilising the YPF taxonomy and guidelines to enhance meaningful engagement with youth in the investment process.

All above deliverables are due by October 2024.

In the second phase, the principles, taxonomy and guidance will be tested in a new YPF transaction. The intended outcome of Phase 2 is to increase the volume of investments that meaningfully include young people in the origination, design and structuring of new investments and to increase the volume of investments that target youth and peace impacts.

Finance for Peace, the IPYP Project Team and IPYP Youth Coordinators along with two consultants will undertake Phase 1. Throughout the study, opportunities will be sought to align with Interpeace’s Peace Finance Impact Framework (PFIF) and other relevant initiatives.

D. Background and description of the assignment

The work will seek to develop Youth Peace Finance Principles and Taxonomy for investors seeking to align their portfolio and undertake new Youth Peace Finance investments. There are nine steps in this process, and a consultant is sought to complete steps 3-9.

Step

Overview: Phase 1A

Status

1

Draft initial framing of principles and taxonomy (annex 1)

Complete

2

Feedback on the draft from IPYP coordinators

Complete

3

Conduct joint planning for work area A and B with key members of the Steering Committee (formed by Finance for Peace, IPYP project team and IPYP youth coordinators)

Co-led by consultants for work area A & B

4

Identify and select case studies that demonstrate YPF in practice

Led by consultant for work area A

5

Apply the principles and taxonomy to the case studies and collect key insights

6

Identify cases that demonstrate meaningful engagement between investors, young people and youth networks

7

Review findings, redraft the principles and taxonomy and consolidate results

8

Share the re-drafted principles and taxonomy with youth coordinators and other key actors

9

Working closely with Finance for Peace colleagues, develop a module for YPF principles and taxonomy and investor guidance on Finance for Peace’s e-learning platform

Phase 1B will run in parallel and be led by a youth peace researcher to develop investor guidance (“guidance”) on how investors can meaningfully engage with young people in pipeline generation[1]. The consultants leading work area A and B are expected to work together to produce one final product that incorporates the principles and taxonomy, investor guidance and case studies that exemplify YPF in practice, as well as the e-learning module.

Step

Overview: Phase 1B

Status

1

Conduct joint planning for work area A and B with key members of the Steering Committee

Co-led by consultants for work area A & B

2

Literature review of meaningful youth engagement and partnerships within the youth development and peacebuilding community

Led by consultant for work area B

3

Test draft guidance with youth leaders, founders of youth-led peacebuilding organisations or coalitions, networks and other key actors

4

Produce investor guidance to be incorporated into the final product with the consultant on work area A

5

With Finance for Peace, develop a module for YPF Principles and Taxonomy and investor guidance for the e-learning platform

The study builds on an initial framing of a YPF definition, principles and taxonomy outlined in Annex 1 and the work of Finance for Peace under the Peace Finance Investment Framework (PFIF). The consultant will work alongside and in coordination with a youth peace researcher under work area B, who will lead the development of guidance on meaningful youth engagement. This work has been catalysed by Finance for Peace and the IPYP project team in response to growing needs from investors and young people in the development of Peace Finance.

To date, the draft principles and taxonomy (annex 1) have been developed by Finance for Peace and the IPYP project team, with initial feedback from IPYP coordinators. This work highlights the need to establish a normative understanding of Youth Peace Finance and investor guidance and promote meaningful youth engagement all along the investment process. Research by the IPYP coalition in 2023[2] reviewed existing peace impact frameworks and found limited evidence of what a ‘youth lens’ in peace investing would entail. Detailed guidance on how investors can engage young peacebuilders in the development and implementation of such criteria[3] was also missing. Furthermore, as the PFIF feasibility study outlined, where engagement has been conducted, it is often with a superficial focus on local needs or inclusion of beneficiary voices. Engagement happens after investment decisions have been made. Yet, young people can provide additionality to the investment process with their contextual understanding and as positive agents of change.

Detailed guidance for how investors can meaningfully engage in a participatory process with young peacebuilders is absent. Local actors are often marginalised, which limits connection with investors, and with limited formal processes, any grievances are hard to capture. A lack of engagement with community actors, including young people, can result in project failure and despite increasing calls for participatory processes, no investor guidelines have been implemented.[4]

In working in partnership with the youth peace researcher under Phase 1B, the study should incorporate guidelines for investors for meaningful youth engagement. It is crucial that these work packages are mutually reinforcing each other, creating a cohesive guidance product aimed primarily at investors.

The study should be based on interviews with key stakeholders, participatory approaches with young peacebuilders, desktop research and validation with key actors.

E. Tasks [Phase 1A]

To complete the study, the consultant is expected to undertake the below tasks. In responding to this proposal, the consultant should include a proposal of how they would carry out the study, including ideas for proposed tasks to achieve the outcomes.

Step 3: Conduct joint planning for Phase 1A and 1B with the steering committee (2-3 days)

1. Prepare joint planning meetings with key members of the Steering Committee and briefings with other key stakeholders
2. Agree a joint plan for delivering Phase 1A and 1B, including regular discussions with the Steering Committee and external actors e.g. investors

Step 4: Identify and select case studies that demonstrate YPF in practice (5-7 days)

1. Develop a methodology for case study selection with the support of the IPYP network and youth coordinators[5]. The principles and taxonomy will need to be used in the methodology for selecting, short listing and scoring case studies for selection.
2. Based on an initial screening, iterate the principles and taxonomy and then select case studies that demonstrate YPF in practice. These case studies should serve as practical examples of the YPF guidance at work, illustrating their application across diverse scenarios. See examples in annex 1.

Step 5: Apply the principles and taxonomy to the case studies and collect key insights (10-12 days)

1. Apply the principles and taxonomy to the case studies and examine how the case studies demonstrate (or not) the principles and peace impact potential. Identify and document case studies that exemplify the principles and taxonomy in action and note any major gaps or misalignments.
2. Extract key insights, success factors and challenges from the case study analysis, conducting a high level analysis to synthesise core themes across the case studies.
3. Test the principles and taxonomy with a key group of investors.

Step 6: Identify cases that demonstrate meaningful engagement between investors and young people and youth networks (3-5 days)

1. From the case studies analysed, identify examples of cases that demonstrate meaningful engagement of young people and youth networks.
2. With the youth peace researcher, incorporate core themes, success factors and challenges illustrated by the case study analysis into the principles and taxonomy on meaningful youth engagement.

Step 7: Review findings, redraft principles and taxonomy, and consolidate results (5-7 days)

1. Reviewing the findings, re-draft the principles and taxonomy, focusing on clarity, actionability, and alignment with insights from the case studies and YPF principles as well as the PFIF.
2. With the youth peace researcher, consolidate the guidance from Phase 1B into one product.

Step 8: Share the re-drafted principles and taxonomy with youth coordinators and other key actors (5-7 days)

1. Share re-drafted principles and taxonomy with youth coordinators and networks for their feedback.
2. Share re-drafted guidance with other key actors for their feedback e.g. investors, development banks.
3. Incorporate feedback to refine the principles and taxonomy, keeping it concise and focused on the most critical and actionable recommendations.

Step 9: With Finance for Peace, develop a module for YPF Principles and Taxonomy and investor guidance for the e-learning platform (5 days)

F. Experience

The ideal candidate will have:

1. Minimum 5 years of experience in sustainable investment practices, ESG, peace or a related investment field [essential]
2. Understanding of the Youth, Peace and Security (YPS) agenda [desirable]
3. Experience working in or with fragile and conflict-affected contexts [desirable]
4. Experience working with multi-actor coalitions, participatory practices and managing projects [desirable]

Candidates will be screened on the basis of the above criteria and shortlisted candidates will be invited for an interview.

G. Timeframe and deliverables

The deliverables are expected to be completed by October 2024 with mid-term deliverables due in August 2024, in advance of the UN Summit of the Future where initial findings can be circulated for dissemination and discussion.

It is expected for the consultant to take between 35-46 days to complete this work.

The final deliverable is expected to include i) principles and taxonomy ii) investor guidance on how to meaningfully engage with young people in pipeline development, iii) case studies that exemplify YPF in practice iv) e-learning module on the principles and taxonomy, guidance and cases.

A communications team will support the editing and production of a final publication.

H. Reporting and feedback

This tender process is used to identify a technical finance consultant for phase 1A. A separate tender has been published to identify a youth and peace researcher for phase 1B. Both research teams are expected to collaborate and align closely together.

The tasks listed above are to be performed in an interactive and iterative process in collaboration and with support from the Finance for Peace, IPYP project team and IPYP youth coordinators, who will form the Steering Committee.

The consultant(s) will report to the Head of Standards of the Finance for Peace initiative.

I. Budget

In responding to this tender, candidate(s) should include the projected budget for the work.

Annex 1: Draft YPF guidance

The draft guidance below has been developed by F4P, the IPYP project team and is undergoing consultation with IPYP youth coordinators. The guidance is expected to emerge from the study and from youth leadership and is therefore set up here to provide direction, but should be adapted as findings from the study emerge.

YPF definition: Finance that positively impacts young people and peace outcomes through principles of meaningful youth engagement and empowerment.

Draft YPF Principles: Principles provide a guide for investors to underpin the ethos of youth peace impact investing.

1. Inclusivity: Ensure that YPF initiatives actively include and represent youth from diverse backgrounds, particularly those from conflict-affected regions. This requires that initiatives respond to the different and added barriers marginalised young people face based upon intersecting forms of oppression. Inclusivity should also extend to embracing various types of financial instruments and approaches that cater to different contexts and needs. This principle has been drawn from the core values of peacebuilding and social equity.
2. Youth Empowerment: Empower young people by involving them in decision-making processes at all levels of YPF initiatives. This includes planning, implementation, monitoring, and evaluation, ensuring that their voices are heard and their insights are valued and acted upon. This principle is rooted in youth development theory which emphasizes the importance of giving young people agency, voice and involvement in decision making that affects their lives.
3. Sustainability: Align YPF initiatives with long-term peace and economic development goals. Ensure that these initiatives are environmentally sustainable, economically viable, and socially equitable, contributing to lasting peace. This principle is reflective of the sustainable development goals.
4. Transparency and Accountability: Maintain high standards of transparency and accountability in all YPF activities. This involves clear reporting, open communication with stakeholders, and mechanisms for feedback and redress. These are fundamental principles in both the financial and peacebuilding sectors.
5. Collaboration and Partnership: Foster collaboration between various stakeholders, including youth organizations, financial institutions, policymakers, and peacebuilding entities. Promote partnerships that leverage different strengths and perspectives for more effective and comprehensive YPF initiatives. This principle is informed by the recognition that multi-stakeholder engagement, including public-private partnerships.
6. Innovation and Adaptability: Encourage innovative approaches to peace finance that are adaptable to changing circumstances and evolving conflicts. Support creativity in financial mechanisms, program designs, and partnership models. Drawing from the fields of social entrepreneurship and impact investing, this principle encourages creative solutions and flexibility.
7. Conflict Sensitivity: Ensure that YPF initiatives are designed and implemented in a manner that is sensitive to the local context and does not exacerbate existing tensions or create new conflicts. This includes understanding the socio-economic, cultural, and political dynamics at play. Rooted in peacebuilding practice, this principle ensures that finance initiatives are aware of and responsive to the local context and conflict dynamics.
8. Impact Orientation or Intention: Focus on measurable outcomes and impacts, ensuring that YPF initiatives contribute to peacebuilding in tangible ways. Develop clear metrics and evaluation methods to assess the effectiveness and impact of YPF activities. Influenced by the impact investing field, this principle focuses on creating measurable social and environmental impact, aligning financial initiatives with broader peacebuilding objectives.
9. Learning and Sharing: Promote a culture of learning within the YPF ecosystem, encouraging the sharing of experiences, successes, and lessons learned. Facilitate knowledge exchange between different regions and sectors to enhance the effectiveness and reach of YPF initiatives. This principle is based on the concept of knowledge management and continuous improvement in development and peacebuilding practices.
10. Resilience Building: Aim to enhance the resilience of youth and communities through YPF initiatives, enabling them to better withstand and recover from shocks and stresses, including economic downturns, social upheavals, and environmental crises. Drawing from the fields of disaster risk reduction and community development, this principle focuses on strengthening the capacity of youth to withstand and recover from adverse situations

Draft YPF taxonomy: Peace taxonomy serves as guidance for investors to be specific about the types of changes they seek to make and provide further clarity as to what kind of peace additionality is aimed for.

Safety and Security

• Direct interpersonal violence: Support programs that engage youth in violence prevention and offer alternatives to violent behaviour, such as sports, arts, and mentorship programs.
• Sexual and gender-based violence: Fund initiatives that empower young people, especially women and girls, to combat SGBV through education, advocacy, and support networks.
• Violence against children: Invest in child protection services and educational programs that promote non-violent discipline and offer support to at-risk youth.
• Collective and intercommunal violence: Back youth-led community dialogue initiatives that aim to resolve tensions and foster mutual understanding among different groups.

Social Peace

• Vertical social cohesion (state and society trust): Support projects that enhance the engagement between youth and governmental institutions, aiming to build trust and promote civic participation.
• Horizontal social cohesion (trust between groups): Fund youth-led initiatives that bridge divides between different social, ethnic, or religious groups through community projects, joint ventures, or dialogue processes.
• Equitable access to resources and basic services: Invest in youth entrepreneurship and job creation projects in sectors like education, health, and housing, ensuring equitable access for marginalized youth.
• Impact on structural grievances: invest in youth peacebuilding groups that work to resolve grievances that mark the origin of violence (e.g. land rights/titles, access to natural resources)
• Impact on inclusion: invest in youth leadership and participation in deal origination and development.

Political Peace

• Diplomatic relations and peace processes: Encourage youth participation in peace negotiations and political processes, including observer roles or consultation mechanisms.
• Infrastructure for peace: Support infrastructure or service projects led by youth or targeting youth beneficiaries, which contribute to sustaining peace agreements or processes.
• Transboundary issues: invest in youth peacebuilding groups that work to strengthen transboundary relations e.g. in the case of water or energy projects.

The consultant should identify case studies with youth leadership. Examples of such case studies may include:

Youth-led social enterprises: Look for social enterprises or businesses founded and operated by young entrepreneurs that have a clear peacebuilding or conflict-resolution component. These entities should demonstrate how economic activities can contribute to peace and how young people lead such initiatives.

Youth-inclusive financial mechanisms: Identify programs or projects where financial mechanisms (like microfinance, impact investing, or social bonds) have been specifically tailored to include and benefit young people in conflict-affected regions, demonstrating the principles of inclusivity and sustainability.

Innovative funding models for peace: Explore case studies where innovative funding models have been used to support peace initiatives involving youth. This could include crowdfunding, diaspora funding, or blended finance models that combine different types of capital.

Youth in development and post conflict reconstruction: Look at examples where young people have played a significant role in economic recovery and peacebuilding in post-conflict settings, highlighting how their economic engagement has contributed to broader peace efforts. For example, in essential services e.g. water, sanitation, health or energy projects.

Cross-sector partnerships for youth and peace: Identify partnerships between the financial sector, NGOs, government agencies, and youth organisations that have successfully implemented programs or projects at the intersection of finance and peace, showcasing collaboration and partnership.

[1] Guidance should build on best practice e.g. Checklist for Meaningful Youth Engagement – UNOY

[2] See the IPYP inception report: https://cnxus.org/resource/investing-and-partnering-with-youth-for-peace-inception-report-2023/?swcfpc=1

[3] The only known guidance being developed is by UNICEF who are developing a “child lens” for investors.

[4] See examples cited in: International Alert, ’Towards peace-positive investment Bringing investors and fragile and conflict-affected states together, sustainably’, (Geneva: International Alert, 2022), https://www.international-alert.org/wp-content/ uploads/2022/05/Peace-Positive-Investment-EN-2022.pdf.

[5] Case studies may not yet be documented and the consultant may be required to document cases from interviews

How to apply

We welcome qualified consultants of diverse origins and backgrounds to submit their application via [email protected] no later than end of day 12 June 2024, consisting of the following:

1. A proposal on how you would undertake this study, including a project plan and timeline of tasks. The above scope of work should be used as guidance and ideas are welcomed on how you would propose the outcomes of the work are achieved.
2. A CV that demonstrates relevant experience.

The below annex provides background information on the draft principles and taxonomy and scope of work for phase 1A