A national body including some of the key figures in impact investment have called on government to put £2bn into a fund to promote an “inclusive economy”.
The call is one of 15 recommendations put forward in The Rise of Impact, a report published today by the UK National Advisory Board on Impact Investing – known as UK NAB – which is the UK representative at an international steering group on impact investment.
“We estimate that we could influence an additional £3trn to incorporate impact to some degree over the next decade, of which £300bn could be channelled into investments that are helping to directly address critical social and environmental challenges,” the report says.
It says that at present, around £150bn is already involved in impact investing.
In addition to the £2bn fund, the report calls on government to change the law on pensions, introduce compulsory social value weighting to all government contracts, create a new legal form for companies working in the inclusive economy, and set up a taskforce to promote impact investing.
The UK NAB has a 15 strong panel of senior figures including Dawn Austwick, chief executive of the Big Lottery Fund, Sir Harvey McGrath, chair of Big Society Capital, Nick O’Donohoe, chief executive of CDC and former chief executive of BSC, and Sir Tony Hawkhead, chief executive of Action for Children.
“There is a growing realisation in the business world that ‘doing good’ and ‘doing well’ are not mutually exclusive,” said Michelle Giddins, founder of social investor Bridges Ventures and chair of the UK NAB. “In fact, the opposite may be true: as a business, having a clear societal purpose can help to open up new markets, attract new customers, better engage employees, and drive sustainable, risk-adjusted returns.
“As more and more organisations embrace this way of thinking, exciting new opportunities for collaboration are starting to emerge between businesses, government, the investment community and civil society.
“The UK has long been a leader in this emerging field. But in recent years, some of the big leaps forward have happened elsewhere. We want the UK to remain in the vanguard of this movement.
“The UK National Advisory Board on Impact investing and Practitioners Council is a group of leaders from finance, business, impact investing and civil society, who have provided their time, expertise and leadership to help make this happen.
“In this report we offer five practical, actionable recommendations that can help the UK be a leader in building a more inclusive and sustainable economy, and tackle some of the greatest challenges of our time. I am excited to present our findings to you and look forward to continuing the discussion about the opportunities and the imperatives that we face.”
The UK NAB is separate to a government-backed advisory group on social investment by individuals, which is due to report this autumn, and is led by Elizabeth Corley, vice chair of Allianz Global Investors.
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