How To Map An Investment Chain
Things to Keep in Mind Before Mapping an Investment Chain
Every investment chain is unique. Mapping an investment chain can be more or less complicated depending on a number of factors, including its size and geographic reach. A large investment chain might be spread over a number of different countries or continents.
For example, a project in Africa may have investors in Asia and buyers in Europe. One company might also be spread over many countries. A large buyer of an agricultural product, for example, might have its headquarters in Europe, a visible retail brand in the United States and Asia, and be listed on public stock exchanges in New York, London and Hong Kong.
When mapping an investment chain, we recommend keeping track of the information you find using our investment chain worksheets. Record the actors you discover on Investment Chain Worksheet 1; using that information, complete Investment Worksheet 2.
As you do the mapping, it is helpful to keep the following factors in mind:
Geography is important: Key actors in an investment chain can be spread across different countries and continents. This means that they are subject to different laws, policies and regulations that apply in their home countries as well as in the host countries in which they operate. The legal, social and political situation in the different countries involved can both limit and increase the advocacy opportunities to influence the project.
It is therefore important to note which countries the actors are based in and which other countries are relevant to their operations. For example, an actor may have a visible retail brand in another country, including a distinctive name, logo and colors that consumers recognise. In addition, they may be listed on public stock exchanges in several countries, a common practice.
Some information may be missing: It can be difficult to trace all the actors and relationships in an investment chain, particularly those far upstream or downstream, because there is often a lack of publically available information. Even after conducting your research, you may have missed major pieces of information. Don’t be disheartened! Be persistent in your research and develop the best possible advocacy strategy with the information you have. Over time, new important pieces of information often come to light, and your advocacy strategy can evolve as you discover more about the investment chain.
Your research might be messy: Because information can be hard to find, you can’t always be systematic about doing the research. After researching upstream actors for a while, you may not have found much, so move on to the downstream part of the investment chain to see if you can identify buyers. You might find helpful information that you can use when you come back to the upstream research. Keep an up-to-date list of all sources of information, as these may be useful later.
Investment chains change over time: Investment chains are dynamic, and the actors involved can change over time. For example, an investor may decide to divest (sell all of its shares) or a subcontractor might stop providing services to the business. The business may also seek new investors or new major buyers of its product.
Relevant external factors might also change. For example, laws and policies in home or host countries – or even governments – may change, which can open or close advocacy opportunities. Since advocacy campaigns can take years, you should look out for major changes in the investment chain, because these changes may affect your strategy. Keep note of the publication date of sources you are using. When you have multiple sources for similar facts, make sure you use the ones that are most recent.
Some actors have significant power and influence: Some upstream and downstream actors have a lot of influence over the business that is managing project. For example, one investor might own the vast majority – or even all – of the shares of the parent company, which in turn wholly owns the business managing the project. Or there may be only one buyer that purchases all of the product from the project.
Powerful players such as these are usually able to exert significant influence over a project. Their choices, such as whether to continue to invest or to buy a product, have big financial implications for the business. Look out for this type of information while conducting your research because it is very important for assessing pressure points in the chain and developing your advocacy strategy.