Impact investment taskforce calls for UK government to free $1 trillion finance



A new report from the G8 Social Impact Investment Taskforce has called on the government to recognise the potential for social impact investing in the UK – and help the private sector unleash $1 trillion (£615bn) in investments ready to generate profits and social good.

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Sir Ronald Cohen, chair of the Social Impact Investment Taskforce, will present the case for increased access to impact investment to chancellor George Osborne on Monday.

He explained that there is already $1 trillion in capital from the private sector ready to be invested in businesses and organisations that work for social and environmental good. Interest in the sector is also rising among big players, such as the Rockefeller Foundation.

Cohen said, “This is not about increasing or reducing public expenditure, but helping government to benefit from innovation and private sector capital in order to achieve more impact with the money it has.

“Social impact investment harnesses the forces of entrepreneurship and capital and the power of markets to do good”.

Cohen – known as the father of social investment – has previously said that impact investing needs measures to turn it “into something that is like venture capital or private equity” and called for the government to reduce barriers for this kind of investment.

His recommendations include payment-for-outcomes programmes, involving social businesses in public services and increase the offer of impact investments for pension funds.

Meanwhile, the Charities Aid Foundation (CAF) has said that while social impact investment plays a crucial role for societies, charities need a form of finance that puts social good before profits – and not on the same level.

Rhodri Davies, programme leader of Giving Thought at the Charities Aid Foundation, said, “It’s great that the G8 has been looking into the future of social investment and its increasing role in meeting the needs of communities and voluntary organisations around the world.

“But we can’t get too carried away pursuing a grand vision of a future when the reality at the moment is that charities primary need is simply access to affordable repayable finance. This may have low returns for investors but will ultimately create the widest impact.”

Photo: bionicteaching via Flickr

Further reading:

Triodos survey says 3m may consider social investment in next year

Impact investment ‘developing rapidly’, says UKSIF report

Cameron: ‘social investment can be a great force for social change on the planet’

Impact investment to grow by $1bn in 2013

Sir Ronald Cohen: impact investing needs venture capital-style support


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