Impact investors call for £2bn government fund
A national British investment body has called on the government to dedicate £2 billion to a fund aimed at promoting an "inclusive and sustainable economy", with the goal of aligning institutional investors' capital to the United Nations' sustainable development promises.
The call was one of 15 recommendations put forward in the newly published report 'The Rise of Impact', which was created by the UK National Advisory Board on Impact Investing (UK NAB), which represents the UK within the global impact investment community.
According to the report, around £150 billion is currently dedicated to impact investments, but it suggests that the introduction of the new fund, along with the other recommended changes, could vastly increase this sum.
The additional recommended changes include the introduction of obligatory social value weighting on government contracts, changes to the laws on pensions, the creation of a new legal form for firms working within the inclusive economy and the creation of a team tasked exclusively with promoting impact investing.
"We estimate that we could influence an additional £3 trillion to incorporate impact to some degree over the next decade, of which £300 billion could be channelled into investments that are helping to directly address critical social and environmental challenges," the report says.
According to Michelle Giddens, chair of the UK NAB, many businesses and investors are beginning to realise that doing well in their investments and "doing good" socially can occur simultaneously, with many even reaching into new markets as a result of embracing a strong "societal purpose".
In fact, Ms Giddens argues that the UK has long held a position as a leader in the field of impact investing and suggests that, by embracing the suggestions featured in the UK NAB report, British investors could help Britain remain in its role as a "vanguard" of the field.
"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," she said.
"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."