The Impact World This Week: 19 December 2024

Asia: US$80bn of impact investments are now allocated to Asia, according to the Global Impact Investing Network (GIIN), up from US£51bn in 2019. Among the 305 impact organisations included in the GIIN’s 2024 Impact Investor Survey, 53 organisations were headquartered in Asia, and 109 were based outside Asia while allocating some investment in Asia. The latest data, explored in In Focus: Impact Investing in Asia in 2024 shows that Asia tends to yield better returns than globally, while 89% of investors say their financial performance is either outperforming or in line with expectations and 88% report the same for impact returns. Looking at sub-regional trends, more than half of Asia-focused investors had impact allocations toward south east Asia (54%) and south Asia (51%), which accounted for 12% and 29% of total Asia-focused investors’ impact assets under management, respectively. Investors allocating capital to East Asia represented 37% of the sample, and 13% of Asia-focused investors’ impact assets under management. 

• Read more: Impact investments worldwide break through US$1.5tn – 2024 GIIN report

UK: GMCVO, a social investor and support body for social enterprises and charities in Greater Manchester, went into administration on 27 November after facing “significant financial difficulties”. The organisation delivers social investment programmes funded by investors including Better Society Capital and Access – the Foundation for Social Investment. According to its latest impact report, GMCVO provided nearly £1m in loans and grants to 10 social enterprises and charities in the city-region in 2022-23. So far 15 people have lost their jobs, according to the BBC. Administrators are working to transfer GMCVO’s activities to different partners and are hoping to save jobs, a spokesperson told the BBC. They have retained some staff to “[minimise] disruption to the community” while talks with partners are under way. Head of investment Cat Chrimes confirmed remaining staff have continued working, distributing over £500,000 in grants to more than 30 organisations since administrators were appointed.

Global: The ‘motherhood penalty’ means that midlife women are least likely to become social entrepreneurs. Entrepreneurship, age, and social value creation: A constraint-based individual perspective reveals the findings of a study of 5,400 social entrepreneurs across 44 countries led by Ute Stephan of the Centre for Sustainable Business at King’s Business School in London reveals that household responsibilities, childcare and financial pressures force many women to prioritise profit over social impact during their “peak start-up years”. Professor Stephan called upon governments to address systemic barriers such as the cost and availability of childcare and care for elderly people.

• Read more: Beyond pink-collar jobs: how the social economy can step up on gender equality

Europe: An EU advisory group is calling for the European Commission to integrate impact investing in its sustainable finance framework. In a report published this week, the EU Platform on Sustainable Finance recommends a definition of impact investing be added to the bloc’s sustainable finance disclosure regulation (SFDR) – which requires financial institutions to disclose their sustainability performance. Current classification has been criticised for falling short of distinguishing impact investing from other types of sustainable finance, and the report calls for a new category of investment products that  “appropriately reflects the specificities of impact investing”, with a legal definition based on existing understanding of impact investing in the market to avoid confusion and enable alignment with approaches outside of the EU.

MENA: The EU and Germany are launching a €50m fund to help social enterprises access finance in North Africa and the Middle-East. Speaking at Impact Europe’s Impact Week at the end of November, Gert Jan Koopman, head of the EU’s DG NEAR, the department in charge of the bloc’s relationships with its neighbouring countries, said the Social Entrepreneurs Fund (SEF) would be the “first ever social economy fund” to provide equity and loans to social entrepreneurs in the region. SEF will be funded by the EU (which will provide €15m) and the German Federal Ministry of Economic Cooperation and Development (€35m), and will be managed by Germany’s development finance institution, KfW, a source at the EU Commission told Pioneers Post. They added SEF was aimed at generating jobs through support of the private sector, and will be set up as a complementary measure to the existing grants and capacity-building projects. 

Spain: The first €50m was allocated this week by Spain’s new social investment wholesaler, the Fondo de Impacto Social (or Social Impact Fund), which was founded with €400m of government money last year. €30m will be managed by Impact Bridge Asset Management, and €20m will be managed by Q-Impact. Both managers will put the money into funds which focus on supporting businesses that are tackling social and environmental challenges in Spain. The Fondo de Impacto Social is managed by state-owned fund manager Cofides. 

• Read more: Spain launches €400m impact investment wholesaler as market booms

UK: A new All-Party Parliamentary Group on Social, Community and Cooperative Economy held its first meeting in Westminster last week. Social Enterprise UK provides the secretariat for the group, which aims to increase understanding of diverse mission-led business models, such as social enterprises, co-ops, mutuals, employee-owned and community business, to build a more inclusive economy. Members include longstanding social enterprise champion Baroness Glenys Thornton as vice chair, SEUK chair Lord Victor Adebowale and former social entrepreneur Josh Barbarinde. APPGs are informal groups of lawmakers in the UK who share a common interest.

Figure of the week: 32,500 is the number of Community Interest Companies now registered in the UK. CIC is a legal form introduced in 2005, designed to meet the needs of social enterprises, although they are not required to trade and may rely on grant funding. The Regulator of Community Interest Companies Annual Report 2023 to 2024, published today, shows an expanding movement with 7,230 new CICs incorporated during the year. 23% of CICs are still on the register since it was established in 2005.

Movers and Shakers

• Mercedes Valcárcel is the new director general of SpainNAB. She takes over the role from José Luis Ruiz de Munain, who has led the representative body for impact investing in Spain since it was founded in 2019.
• Robin Hodess will take up the CEO position at the Global Reporting Initiative in February, replacing interim CEO Cristina Gil White.