The role of the UK in the global impact investment movement

The role of the UK in the global
impact investment movement
Nick Hurd MP
An idea whose time has come
“Impact investment is emerging as a new
unifying force in dealing with social issues,
driving innovation and prevention to improve
lives. It harnesses the forces of
entrepreneurship, innovation and capital
and the power of markets to do good. One
might with justification say that it brings the
invisible heart of markets to guide their
invisible hand”
Sir Ronald Cohen, Taskforce Chair, September 2014
Strong leadership from the top
“I want to use our G8 presidency to push this
agenda forward. We will work with other G8
nations to grow the social investment market
and increase investment, allowing the best
social innovations to spread and help tackle
our shared social and economic challenges”
David Cameron Prime Minister, UK
World Economic Forum, Davos 2013
High level endorsement
“It is urgent that governments throughout
the world commit themselves to developing an
international framework capable of promoting
a market of high impact investments and
thus to combating an economy which
excludes and discards”
Pope Francis, June 2014
Mission
The G8 Taskforce brings together government
officials and senior figures from the worlds of
finance, business and philanthropy,
from across the G8 countries, to stimulate the
development of an effective global social
impact investment market
A global impact movement
UK
GERMANY
USA
CANADA
ITALY
FRANCE
JAPAN
AUSTRALIA
(Observer)
EU
Global learning network
Mission lock: the ‘benefit corporation’
legal structure protects the mission of
social businesses
Building up impact intermediaries: the
UK established Big Society Capital to act
as a wholesaler of impact capital and a
champion to develop the market
Social Impact Bonds: Social Finance
Israel is working on a SIB to tackle Type
2 Diabetes
Lessons from the UK: the role of government
INCREASING
THE SUPPLY
OF CAPITAL
INTO THE
MARKET
SUPPORTING
DEMAND FOR
CAPITAL BY
GROWING THE
INVESTMENT
PIPELINE
✓ Social Investment Tax Relief
✓ Creation of Big Society Capital
✓ Investment Readiness Programme
✓ 30 Social Impact Bonds
Lessons from the UK: a thriving ecosystem
Demand
Impact-seeking
purchasers
Supply
Impact-driven
organisations
Government
procurement of
services
Grant-reliant
organisations
(e.g. charities)
Government as
commissioners of
outcomes
Grant-funded
organisations with
trading activities
Foundations as
commissioners of
outcomes
Social enterprises
/profit-constrained
organisations
Socially minded
consumers of goods and
services
Profit with purpose
businesses
Forms
of finance
Secured loans
Channels
of impact
capital
Social banks
Government / EU
investment
Social investment
wholesaler
Unsecured loans
Community
development finance
institutions
Charitable trusts and
foundations
Charity bonds
Local funds
Social impact bonds
Impact investment
fund managers
Institutional investors &
banks
Quasi equity
Impact investment
intermediaries
Equity
Socially minded
corporate purchasers of
goods and services
Sources of impact
capital
Businesses setting
significant outcomes
objectives
Grants
Corporates
High net worth
individuals
Crowd-funding
platforms
Mass retail
Progress made and next steps
June 2013
Taskforce Launches
September 2014
Publication of TF report
and four subject papers
National Advisory Boards publish
country papers
All reports available at:
www.socialimpactinvestment.org
2015: Working towards the formation of a Global
Steering Committee on Social Impact Investment,
including Latin America and others
The G8 Taskforce and Latin America
How can we
collaborate most
effectively to
develop a global
agenda and learn
from each other?
What can be done
to empower social
entrepreneurs and
engage
governments?
Where do
the priorities
in the region
lie?
What are the
current efforts in
institution building
and how can they
be supported?
What are the
major outstanding
challenges?
Gracias
Obrigado
Thank you