Impact Tokens

The report explores the use of impact tokens—blockchain-based digital representations of social and environmental impacts—to overcome five primary barriers in the impact investing industry: lack of appropriate capital, market segmentation, limited exit options, unsophisticated measurement practices, and a shortage of high-quality opportunities. Through ten case studies across sectors like agriculture, energy, and forestry, the document demonstrates how these tokens can increase trust, promote financial inclusion, accelerate monitoring, reporting and verification (MRV) processes, and incentivize sustainable behaviors.

• The United Nations estimates that achieving the SDGs requires annual investments between USD 5 trillion and 7 trillion, with developing countries facing an investment gap of approximately USD 2.5 trillion.
• Impact investing is defined as investments intended to generate positive, measurable social and environmental impact alongside financial returns, and it was estimated to be worth USD 502 billion in 2018.
• The Global Impact Investing Network (GIIN) identifies five primary barriers to scaling impact investing: lack of appropriate capital across the risk/return spectrum, lack of common definitions and market segmentation, insufficient exit options, unsophisticated impact measurement, and a lack of high-quality investment opportunities.
• Impact tokens are blockchain-based tokens that represent specific measurement metrics of positive social and environmental impacts, such as tonnes of carbon dioxide or school attendance, providing verified proof of impact for investors.
• Impact tokens can increase trust by utilizing decentralized ledgers and smart contracts, reducing the need for centralized intermediaries and increasing transparency in supply chains, as seen in the Fishcoin project for seafood.
• Blockchain ecosystems promote financial and social inclusion by providing unbanked populations with digital wallets and IDs, enabling them to participate in the global economy and access financial services.
• Impact tokens accelerate monitoring, reporting and verification (MRV) by incentivizing data collection from actors like farmers and fishers and combining blockchain with AI, IoT, and satellite data for more accurate verification.
• Tokens can incentivize sustainable behaviors by rewarding users for positive actions, such as the Energi Mine project for energy saving or BYD's carbon credits for electric vehicle users.
• Tokenization addresses the 'suitable exit options' challenge by enabling the creation of liquid secondary markets where impact tokens can be traded peer-to-peer, reducing the liquidity risk associated with private securities.
• The use of impact tokens can lower the cost of capital and improve project bankability by mitigating counterparty, data, and liquidity risks and reducing transaction costs, particularly for cross-border payments in developing countries.

APA

Uzsoki, D., & Guerdat, P. (2019). Impact Tokens. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/impact-tokens.pdf

Chicago

Uzsoki, David, and Patrick Guerdat. Impact Tokens. International Institute for Sustainable Development, 2019. https://www.iisd.org/system/files/publications/impact-tokens.pdf.

Wikipedia

{{cite report |last1=Uzsoki |first1=David |last2=Guerdat |first2=Patrick |title=Impact Tokens |publisher=International Institute for Sustainable Development |date=April 2019 |url=https://www.iisd.org/system/files/publications/impact-tokens.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{uzsoki2019impact, author = {Uzsoki, David and Guerdat, Patrick}, title = {{Impact Tokens}}, institution = {International Institute for Sustainable Development}, year = {2019}, month = apr, url = {https://www.iisd.org/system/files/publications/impact-tokens.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }