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