Anna Kucinska
06 October 2014

Report „Impact Investment: The Invisible Heart of Markets” published in Spetember under the UK’s presidency of the G8

The Report, entitled Impact Investment: The Invisible Heart of Markets – Harnessing the power of entrepreneurship, innovation and capital for public good calls on governments and the financial sector to take action to unleash $1 trillion of private sector impact investment to tackle social problems.
 
It highlights the potential that impact investment has to help solve some of society’s most pressing issues, such as caring for children and the elderly, community regeneration, financial inclusion, housing and prisoner reoffending. Social Impact Investments are investments made into businesses and social sector organisations, directly or through funds, with the intention of generating a measurable, beneficial social and environmental impact alongside a financial return.
 
The report was published in September this year by the Social Impact Investment Taskforce established under the UK’s presidency of the G8. The UK used the opportunity of its 2013 G8 Presidency to put Social Impact Investment (SII) on the global stage. The PM commissioned a global taskforce – led by Sir Ronald Cohen – to bring 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 SII market.
 
The report lays out several clear recommendations, devised by government and private sector experts from across the G7, EU and Australia, which include:

  • encouraging pension funds and providers of tax-advantaged savings schemes and products to include impact investments as part of their offering,
  • enabling impact-driven businesses to lock-in their social mission through legal forms and removing regulatory obstacles around fiduciary duty,
  • expanding regulatory and tax incentives offered for investment in social enterprises and charitable organisations, enabling investors to offset their impact investment income against tax,
  • establishing a kitemark for impact investment products to make them quality certified, accredited, recognisable and differentiated in a complex marketplace,
  • developing social impact bonds and development impact bonds,
  • appointing a senior government Minister to champion impact investment within and beyond government,
  • reforming legal and regulatory frameworks for charitable organisations to help them to embrace entrepreneurial risk-taking and innovation where it furthers their mission,
  • publishing better and clearer data about the cost to government of addressing social issues to encourage more impact investment participants to the market place.

Commenting on the Report, the Chancellor of the Exchequer the Rt Hon George Osborne, said: “This is a compelling and comprehensive report. It not only demonstrates the UK's leadership in the crucially important issue of social investment, but it articulates what still needs to be done to unleash new funds. This report sets out a clear plan of action for governments and markets and I look forward to implementing many of its proposals.
 
For more information and the full report visit: http://www.socialimpactinvestment.org
 
Source: press release, http://www.socialimpactinvestment.org