Martin Signer answers:

When evaluating a Sustainable Development (SDG-aligned) project, your goal is to determine whether it is impactful, financially viable, operationally credible, and ethically sound. Strong due diligence separates well-structured development projects from “impact-washing” proposals.

Below is a structured vetting framework you can use before investing.

1. Problem Definition & SDG Alignment

Start by validating whether the project is solving a real, measurable development problem.

Ask:

• Which specific SDG(s) does this project address?
• What is the baseline condition (before intervention)?
• What evidence shows this is a priority problem locally?
• Who has validated the need (government, NGOs, local communities, data sources)?
• Is the intervention clearly mapped to a measurable outcome?

What you want to see:

• Clear SDG mapping (not generic “we support sustainability” language)
• Baseline data (poverty rates, emissions, access gaps, etc.)
• A defined target population

2. Theory of Change & Impact Logic

This is the “how does this actually work?” test.

Ask:

• What is the causal pathway from activity → output → outcome → impact?
• What assumptions are required for success?
• What evidence supports this model (pilot studies, past implementations)?
• Are there comparable projects with proven results?

Red flag: vague statements like “empower communities” without measurable mechanisms.

3. Impact Measurement & KPIs

You need quantifiable outcomes.

Ask:

• What KPIs are tracked (e.g., CO₂ reduced, households served, income increase)?
• How are metrics collected and verified?
• Is there third-party validation or auditing?
• How frequently is impact reported?
• Are there unintended negative impacts tracked?

Strong signals:

• Use of standardized frameworks (e.g., IRIS+, SDG indicators)
• Independent verification or audits
• Transparent reporting dashboards

4. Local Stakeholder Engagement

Sustainable projects fail when they are externally imposed.

Ask:

• Who are the local implementing partners?
• How were communities involved in project design?
• Is there government alignment or approval?
• Do beneficiaries have decision-making input?
• How is cultural or regional context accounted for?

Red flag: “top-down” projects designed without local participation.

5. Financial Model & Sustainability

You must understand how the project survives financially.

Ask:

• What is the funding model (grants, revenue, blended finance)?
• What happens after initial funding ends?
• What are the unit economics (cost per beneficiary, cost per outcome)?
• What is the burn rate vs revenue generation?
• Are subsidies required long-term?

Key insight: A “sustainable development” project that depends indefinitely on donor funding is not truly sustainable.

6. Execution Capacity

Many SDG projects fail due to operational weakness, not intent.

Ask:

• Who is the executing team and what is their track record?
• Have they delivered similar projects before?
• What are the governance structures?
• How are decisions made and monitored?
• What partnerships are in place (NGOs, governments, private sector)?

7. Risk Assessment

You should explicitly test for downside risk.

Ask:

• What are the main operational risks (political, environmental, logistical)?
• What happens if adoption is lower than expected?
• What is the contingency plan for funding shortfalls?
• Are there regulatory or land-use risks?
• Could the project create dependency or unintended harm?

8. Transparency & Accountability

This is where credibility is confirmed.

Ask:

• Are financials publicly available or audited?
• Is impact reporting independent or self-reported?
• Can investors access raw data or only summaries?
• What governance oversight exists (board, advisory panel)?
• Are there conflict-of-interest disclosures?

Red flag: opaque reporting with only curated success stories.

9. Exit Options & Liquidity (for investors)

If you are investing capital, understand exit mechanics.

Ask:

• Is this grant-based, equity-based, or revenue-share?
• What is the expected return (financial or impact)?
• Can capital be recovered or reallocated?
• What is the time horizon for outcomes?
• Are there secondary funding rounds or exit pathways?

10. Scalability & Replication

Impact increases when models scale effectively.

Ask:

• Can this model be replicated in other regions?
• What are the constraints to scaling (cost, regulation, infrastructure)?
• Is technology enabling or limiting scale?
• Has the project already scaled successfully anywhere?

Quick Due Diligence Scorecard

Rate each category 1–5:

Key Insight

A credible SDG project should answer this cleanly:

“If we invest X, we can reliably produce Y measurable improvement for Z population over time, with transparent verification.”

If any part of that chain is unclear—impact, measurement, execution, or sustainability—you should treat it as high risk.