Impact Investing OLIVIA DICKSON

Institute T H U R S D AY 7 N O V E M B E R 2 0 1 9
Background to Impact Investing

Definition:

Impact investment consists of

investment in the share or loan
capital of those companies and
enterprises that not only
measure and report their wider
impact on society – but also
hold themselves accountable
for delivering and increasing
positive impact.

Source: Advisory Group Report on Growing a Culture of Social Impact Investing in the UK, 2017
Choices and strategies for investors on the “spectrum of capital”
 How big is the market?

$502bn $1.3trn $444bn

According to the Global Impact According to the Principles for According to the Global
Investing Network Responsible Investment Sustainable Investment Alliance

Source: International Finance Corporation, 2019

 How big could the market for impact investing become?

Public
$21trn
markets
+ Private
$5trn
markets
= Total
$26trn
size

Source: International Finance Corporation, 2019

 Impact Investing Institute
• Combines the Implementation Taskforce on Growing a Culture of Social Impact Investing
Across the UK & the UK National Advisory Board on Impact Investing
• Not for profit and non-commercial
• Catalysing and convening

Elizabeth Corley, Chair of the Management Board:

“The Impact investing market has grown rapidly in the UK and around the world. Investing for positive
impact goes beyond avoiding harm and mitigating risks, and is at the centre of a wider movement towards
more responsible investing. The Institute will play a significant role in ensuring the UK continues to stay at
the forefront of innovation in Impact Investing, enabling UK savers to invest in line with their values and
have increased ownership over the social outcomes that their money generates.”

Sir Harvey McGrath, Chair of the Advisory Council:

“The UK is well-placed with its long running history in impact investing and as a global financial hub to
accelerate the next wave of growth and innovation in impact investing. Big Society Capital is pleased to show
its support to the newly formed Institute. Bringing together the UK NAB and Implementation Taskforce will
create a group with impressive convening power and world-class knowledge of both mainstream and social
investment.”
Supported by…
What will the Institute do?
Better reporting: the journey so far
In December 2016, the UK government set up an independent Advisory Group, chaired by
Elizabeth Corley (former CEO of Allianz Global Investors), to answer an important question:
How can the providers of savings, pensions and investments
engage with individuals to enable them to support more easily
the things they care about through their savings and
investment choices?
The Advisory Group published its report in November 2017, making recommendations in
five key areas:

1. Improve deal flow and the ability to invest at scale

2. Strengthen competence and confidence within the financial services industry
THIS
3. Develop better reporting of non-financial outcomes PROGRAMME

4. Make it easier for people to invest

5. Maintain momentum and build cohesion across initiatives

In March 2018, the Prime Minister commissioned an Implementation Taskforce to carry

forward the five action areas, catalysing collaboration between industry experts
Better reporting within the Implementation Taskforce
The Taskforce refined the
focus of the third key
recommendation to
“develop better reporting
of environmental and
social impact” and went
on to produce a ‘Better
Reporting’ Landscape
Report which set out an
overview of the current
landscape of approaches
to impact reporting.
Area Reporting Practice Reporting Standards Reporting Implementation
Among other things, the Definition The approach to impact Principles, codes, standards and Impact reporting practice
Landscape Report reporting used in practice by guidance external to preparers implementing emerging global
businesses, social enterprises and users of reports relevant to impact reporting standards in the
brought to the fore a and investors based in the UK to impact reporting and legal and regulatory context of the
number of ways in which report and communicate to communicating to investors and UK either focused on specific themes
coalescence could be investors and wider stakeholders. wider stakeholders. / sectors or across all themes /
driven forward. These can sectors.
be grouped into three
areas, covering seven Coalescence • Common anchoring in SDGs • Impact reporting principles
different drivers of drivers • Sector/theme specific indicators and metrics • Definition of impact
coalescence: identified • Use of technology • Declaration of intent
• Legal and regulatory
underpinning
 The way forward for better reporting
The Better Reporting Programme’s vision is:

Transparent, consistent, comparable

impact reporting that reflects and drives
real impact
The success of this
• Anchored in organisational purpose, strategy, culture and
operations, and supporting stewardship and decision making.
programme ultimately
hinges on the collaboration
• Facilitating transparency of the contribution of UK businesses, between key stakeholders
social enterprises and investors of their impact on the
sustainable development goals. that will shape the new
• Enabling members of the public, civil society groups and public
Institute’s role and work
sector organisations to make purchasing and other choices programme.
based on impact.

• Allowing retail and institutional participants in the investment

and savings market to make investment decisions based on
impact.
Our aim and overarching approach

The Institute will work with other

stakeholders to test, influence and implement
global impact reporting standards in the legal The Institute is engaging with
and regulatory context of the UK. stakeholders to seek:

- Feedback and endorsement of

• The Institute believes that achieving the vision of transparent, consistent, the proposed approach
comparable impact reporting calls for concerted, iterative and sustained activity
by a coalition of leading actors across the investment chain. - Suggestions for reporting
• The Institute will commit to building on existing initiatives, not replicating them.
practice projects relevant to
This programme of work will be rooted in acceleration of reporting practice by enterprises and investors
leading actors.
- Commitment to support the
• The programme of work will aim to test emerging global reporting standards Institute’s aims and engage in
being developed by others and to influence these standards prior to coalition
implementation in the UK context.
Key pillars for the better reporting programme
The Institute has the following pillars to make practical progress and shape its longer-term
approach:

1 Build a coalition which shapes Institute’s role and co-creates its work programme

2 Advance exemplary impact reporting practice in the UK

3 Influence consensus on global impact reporting standards

4 Facilitate a reporting implementation of global impact reporting standards

Website: www.impact-investinginstitute.org/