Our methodology
De-risking and impact framework
Through our proprietary Multi-systemic Risk and Resilience Framework (MRRF), we analyse risk and sources of resilience pertinent to each investment and provide an evidence-based method for the design of specific mitigation measures to reduce those risks.
This allows for an accurate pricing of risk and the introduction of actions to strengthen community resilience. In so doing, the MRRF strengthens risk-adjusted returns on investments and their positive social impact.
Other existing models overlook fundamental variables, namely the human and social capital, and technological factors, because of the challenges in tracking them. This limitation leads to price risks imprecisely.
Our MRRF is a comprehensive tool with which our experts can map the most relevant risk and resilience factors around an investment, across seven domains and multiple layers, beyond the traditional understanding of risk.
The mapping phase allows for an accurate costing of capital, before and after the design of resilience-building and peace-enhancing measures. As a result, Peaceinvest understands better the local contexts and can structure the most effective strategies, while addressing common biases in the finance and business sectors.
Our framework uses a robust Bayesian network and Wise Crowd methodologies to map risk relationships, tracking the knock-on effects, chains of events and identifying mitigation actions with the most profitable outcomes.
The MRRF can improve the net present value of investments by ensuring more reliable cash flows and a reduced probability of default, which improves the investment’s credit rating.
