News story

Government leads global co-operation to grow market for social investment

The UK government is leading G8 efforts to grow the global market for social investment.

Measures to grow the global market for social investment have been announced at the first ever G8 conference on the subject.

Britain alone has over 180,000 social enterprises, generating £55 billion for the economy. While many of these organisations have traditionally relied on grant funding, a growing number of investors are now providing them with affordable but repayable finance. This means that socially minded investors can increase the impact their money has, as the returns on funds can be reinvested in new groups and projects dedicated to tackling social problems and boosting economic growth.

At yesterday’s conference, G8 governments committed to help grow the global market for social investment. The first steps towards this include:

  • an OECD report, to value the current international market for social investment
  • work to bring social investment closer to international development projects
  • establish a global expert group to work on best practice and recognised international standards in social investment

An international taskforce, made up of G8 government, industry and civil society representatives will oversee these commitments and will be chaired by Sir Ronald Cohen, founder and chair of the world’s first social investment bank Big Society Capital.

Minister for Civil Society Nick Hurd said;

We have the opportunity to transform the funding environment for ambitious charities and social enterprises. Social investment is the opportunity to move away from hand to mouth funding and access long term affordable finance. It can support much needed growth and social innovation. It is early days and it is not for everyone but the opportunity is an important one. That is why more and more countries are looking closely at the lead we have taken in the UK.

Sir Ronald Cohen said;

The G8 Social Impact Investment Forum and the important initiatives resulting from it are big steps forward in the development of impact investment. I am delighted to be chairing the G8 taskforce, whose bold mission is to turn impact investment into a global force.

Other initiatives announced include a Global Learning Exchange on social investment, open to investors, entrepreneurs and policy makers to debate and create ideas as well as invite new voices to the field.

An open letter from industry congratulated the PM and G8 countries on their efforts to grow the global impact investment market, and to support them going forwards. The letter was signed by over 80 leading voices from finance and civil society – including JP Morgan, Deutsche Bank, Morgan Stanley, Credit Suisse, Goldman Sachs, Big Society Capital, KPMG, the Ford and Rockefeller Foundations and the Omidyar Network.

The conference was also attended by Secretary of State for Work and Pensions Iain Duncan Smith, Secretary of State for International Development Justine Greening, Minister for the Cabinet Office Francis Maude MP and Minister for Civil Society Nick Hurd amongst other foreign government ministers, business leaders and delegates.

Social Capital Markets Conference

The Social Capital Markets Conference (SOCAP) was held from 3 to 6 September 2013. SOCAP is an annual event series that connects global investors, foundations, institutions and social entrepreneurs. Watch a discussion held at SOCAP about the Social Impact Investment Taskforce:

SOCAP session on Social Impact Investment Taskforce

Notes to editors

As part of the UK’s G8 presidency this year, the Prime Minister asked for an event focusing on social investment. There is emerging interest from G8 member states, industry and civil society in the social investment market, with the G8 countries driving this developing global agenda.

This event, which is the first to use the G8 platform to discuss social investment, provided an opportunity both to showcase the UK’s as world leaders in this market; and to help start the processes and discussions which will enable the market to operate effectively on a global scale.

An international taskforce made up of G8 government, industry and civil society representatives will oversee these commitments and will be chaired by Sir Ronald Cohen, founder of the world’s first social investment bank Big Society Capital. Its role is to maintain oversight and advocate consistency across the voluntary initiatives and their supporting working groups and to build engagement across the market, including with industry, foundations and civil society.

The UK government, in partnership with the World Economic Forum, will be establishing a multi-stakeholder exchange – which will be open to investors, entrepreneurs and policy makers from around the world – focusing on sharing best practice on ‘what works’ in impact investing. It will provide existing networks with a shared platform to debate and create ideas as well as inviting new voices to the field.

For more statistics on the social investment market see Cabinet Office report Social enterprise: market trends.

Examples of social enterprises

Blue Sky

Blue Sky Development & Regeneration is a social enterprise established by the charity Groundwork Thames Valley. Blue Sky’s mission is to help break the cycle of re-offending and achieve long-term benefits for society. It was set up to give paid work to people coming out of prison, to enable them to move successfully into long-term employment.

Over the 5 years since it was set up, Blue Sky has employed nearly 500 ex-offenders - that’s greater than the entire inmate population of some of Britain’s prisons. Of these, fewer than 15% have re-offended, a quarter of the national average.

Blue Sky only employs ex-offenders in the grounds maintenance and recycling sectors. Ex-offenders work in teams of 4 – 6, each team supervisor is also an ex-offender and act as a mentor and leads by example. Blue Sky provides a skilled workforce in an employment sector where demand is high.

HCT Group

HCT Group is a social enterprise in the transport industry, safely providing over 12 million passenger bus trips every year. It delivers a range of transport services – from London red buses to social services transport, from school transport to Park and Ride, from community transport to education and training. It reinvests the profits from its commercial work into further transport services or projects in the communities it serves.