New independent institute to push impact investing, influence policy

A new independent body is being created to advance impact investing and to promote the UK as a world leader in this field.

Announced today by the government’s Department for Digital, Culture, Media and Sport (DCMS) and the Department for International Development (DFID), the Impact Investing Institute will be independent of government. It is due to open this autumn, with location to be determined.

The institute has four objectives: to strengthen the market infrastructure for impact investing, increase the amount of capital invested for impact, improve effectiveness of that capital, and make it easier for individuals to invest for impact. This will include “monitoring public policy and regulatory developments and making practical suggestions for changes that would promote the institute’s objectives,” according to the website.

An initiative of the UK National Advisory Board on Impact Investing and the Implementation Taskforce on Growing a Culture of Social Impact Investing in the UK, it is being led by their chairs, respectively Sir Harvey McGrath (also chair of Big Society Capital) and Elizabeth Corley. Financial backing comes from private firms and foundations, the City of London Corporation, DFID and DCMS.

In a statement McGrath said the UK's history of impact investing and role as a global financial hub made it “well-placed... to accelerate the next wave of growth and innovation in impact investing... 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.” McGrath will chair the new advisory council.

The UK has one of the world’s most advanced social investment markets. However, a 2017 report from the National Advisory Board on Impact Investing warned that the country risked losing this top spot, with “some of the big leaps forward” happening elsewhere. “We want the UK to remain in the vanguard of this movement,” wrote then-chair, Michele Giddens.

Corley, who will chair the institute’s management board, said the new body would “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.”

The institute will play a significant role in ensuring the UK continues to stay at the forefront of innovation in impact investing

Recruitment of a CEO begins today. The role is not publicly advertised currently, and a spokesperson did not disclose salary information but told Pioneers Post that senior staff pay would “be benchmarked appropriately.”

Asked how social enterprises and other potential investees can work with the institute, the spokesperson replied only that it would “actively engage across the spectrum of investors and investees – with asset owners, managers and intermediaries and with businesses, social enterprises, and other organisations committed to making a social impact.” The new website lists facilitating access to investment for social enterprises and charities among its focus areas.

The institute also wants to establish the UK as a leader in tackling the Sustainable Development Goals (SDGs). International Development Minister Baroness Sugg said: “The UK public gives more money to charitable causes than any country in Europe, but people might not know how to invest their money in a way that matches their values. We need more private investment for developing countries if we are to achieve the Global Goals [or SDGs] and this new institute will do that by encouraging savers to choose ISAs, pensions and savings products that benefit the issues they care about, like climate change.”

In January this year DFID opened a national consultation to understand people’s views on and interest in ethical and responsible investing. The results will be published in the autumn.

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Header photo: London, by Public Co from Pixabay