Participants examined a wide range of instruments and approaches, including blended finance, thematic and gender bonds, insurance, outcomes-based financing, and debt related tools.
A recurring message was to avoid instrument-led problem solving. Instruments are tools with specific functions and limits. Clarity on objectives should come first, including whether the aim is:
- Mobilising additional capital
- Improving the effectiveness of existing spend
- Shifting incentives and behaviour across systems
Participants noted that in sectors such as climate, and increasingly water, the combination of clearer standards, coordinated platforms, and repeatable financing structures has helped reduce fragmentation and build investor confidence over time. A similar focus on the enabling conditions that shape decisions, rather than on any single instrument, was seen as relevant for gender and equalities.
Participants also noted that technical jargon can act as a barrier to entry for many actors, including movement organisations and practitioners. A practical priority discussed was building shared, accessible language and translation tools that enable different parts of the ecosystem to engage meaningfully, while still retaining sufficient nuance.
Outcomes-based approaches and incentive alignment
Outcomes-based approaches were seen as promising where they improve effectiveness and accountability, but participants stressed that they require scale, flexibility, strong performance management and careful design to avoid minimal compliance outcomes. Participants noted that these structures can become complex and expensive to set up, which can limit replication unless there is sufficient scale to justify transaction costs.
A related point was that outcome metrics must be chosen carefully. Where outcome definitions are too narrow or easily gamed, incentives can drive minimal outcomes rather than durable impact. Participants emphasised the importance of governance and guardrails that protect outcome quality.
Case study: the Skill Impact Bond (India)
A case study on outcomes-based financing in the skilling sector illustrated how paying for employment outcomes, rather than training inputs, can improve performance and inclusion. The model sought to align incentives towards job placement and retention, strengthen data systems and performance management, and mainstream a gender lens. Discussion emphasised the importance of adaptability to labour market conditions, clear metrics that protect outcome quality, and sufficient scale and staying power to justify transaction costs.