Social Impact Investment IAG conference 2016

Transcription

1 Social Impact Investment IAG conference 2016

2 Impact investment could be a great force for social change on the planet and would help build bigger and stronger socie7es. David Cameron, Prime Minister, UK (address to G8 Summit - June 2015) 2

3 What is Impact Inves;ng? Investments made into organisa;ons with the inten;on to generate ac;velymeasured social and environmental impacts alongside a financial return. Is a result of a shie from bogom line thinking (i.e. net income) to triple bogom line thinking (i.e. social, environmental and financial results). 3

4 The Genesis 2000: Sir Ronald Cohen chairs Social Investment Taskforce (UK). 2007: Social Finance UK is established. 2010: UK launches the world s first Social Impact Bond. 2012: Big Society Capital launched. 2014: G8 Social Impact Investment Taskforce publishes report challenging policy makers to harness the power of entrepreneurship, innova6on and capital for public good. 4

5 Forms of impact inves;ng include Impact Bonds Social Benefit Bonds (SBBs/SIBs) Environmental Impact Bonds (aka Green Bonds) Infrastructure Bonds Development Bonds (Financial and Economic) Payment by Outcome (Payment by Result in USA) Other Incen;ve Payments Layered investments Pooled investments 5

6 What is happening globally? UK introduced 30% tax relief for social investments. EU formally recognises European Social Entrepreneurship Funds. G8 leaders launched the Social Impact Inves;ng Forum. Pay for Success programs in the US, facilitated by groups such as Nonprofit Finance Fund and Social Finance. Specialist impact inves;ng fund managers in the US, including Bridges Ventures. (source: Global Impact Inves7ng Network (GIIN) website) 6

7 Canada 1 UK 31 Netherlands 5 Sweden 1 Finland 1 Germany 1 Austria 1 Belgium 1 Switzerland 1 USA 10 India 1 Peru 1 Portugal 1 Israel 2 Social Impact Bond investments around the world as at June 2016 sources: Social Impact Bonds: The Early Years (2016), socialfinance.org.uk Australia 2 (3 since 6/16 ) 7

8 In the six years since the launch of the Peterborough Social Impact Bond: 60 projects have launched in 15 countries 22 projects have reported performance data 21 projects indicate posi;ve social outcomes 12 projects have made outcome payments, either to investors or to be recycled into service delivery 4 projects have fully repaid investor capital 8

9 Launched bonds as at June 2016 (source: socialfinance.org.uk)

10 Bonds in development as at June 2016 (source: socialfinance.org.uk)

11 Role of Government & Policy Source: Adapted from IMPACT Australia Addis, Mcleod & Raine (2013) 11

12 What s happening in Australia - Bonds NSW have two SBBs in play Newpin and Benevolent Society - have also signed a contract to implement Australia s first social impact investment to reduce parolee reoffending and re-incarcera;on and in late October called for RFPs for three more bonds QLD are in the joint development phase of the procurement process for three SBBs in the areas of Homelessness, Re-offending and Issues facing Aboriginal and Torres Islander people seeking to contract the first bond in the first half of 2017 SA in procurement for one SBB decision pending VIC are in establishment mode and have announced funding to inves;gate the use of SBBs to tackle social disadvantage. They are currently running informa;on sessions for stakeholders. WA working with Social Ventures Australia (SVA) to explore poten;al for SIBs or SBBs NT exploring SIBs

13 What s happening in Australia Policy NSW Government released a Social Impact Investment Policy the first for a government in Australia Financial Systems Inquiry Dec recommended Government facilitate development of the impact investment market and encourage innova;on in funding social service delivery Included in the Government response We will examine how best to foster the growth of impact investment in Australia to support private and for-profit investment funds being directed to projects with a social or environmental purpose

14 What s happening in Australia - Federal Government Australian Government is taking an investment approach to welfare and will iden;fy groups vulnerable to dependency This involves applying actuarial analysis to social security data to these iden;fy groups and es;ma;ng the future cost to income support Try, Test and Learn Fund: $96M program announced in the Federal Budget to further progress this investment approach

15 Impact Investment Australia (IIA) Established in 2014 in response to an industry-iden;fied need for dedicated leadership, facilita6on and capacity building Membership includes: Financial service ins;tu;ons, accoun;ng firms, banks, superannua;on funds, universi;es, charity organisa;ons, peak bodies Established an Impact Investment Readiness Fund, seeded with $1 million from NAB. The Fund offers grants of up to $100,000 for enterprises to purchase specialised capacity building support from providers such as advisory, financial, intermediary or legal services Australian Advisory Board on Impact Inves;ng (source: Impact Inves;ng Australia website) 15

16 Impact Investment Australia (IIA) Impact Capital Australia (ICA) A public company proposed by Impact Inves;ng Australia, similar to Big Society Capital in UK. ICA would be a financial ins;tu;on with two func;ons: Impact investment wholesaler (providing loan capital to intermediaries offering quality deals) Market champion (source impacpul, innova;ve and scalable solu;ons and ways to fund them). (source: ICA Blueprint to Market) 16

17 Investor views In its 2016 report, Impact Investment Australia undertook a survey of 123 Australian investors, accoun;ng for more than A$333B of Australia s $2 Trillion funds under management 5 key themes from the Impact Investment Australia 2016 survey: There is growing momentum in impact inves;ng from Australian Investors Ins6tu6ons dominate assets under management and need to be ac;ve par;cipants to grow the market There is unmet need from investors for impact inves;ng Impact inves6ng is diverse, crossing mul;ple sectors and disciplines Investors require evidence on success before increasing alloca;ons to impact investments

18 What s happening in Australia - Impact Funds In 2014 QBE set aside US $100M for a social benefits bond fund 90% of its fund is s;ll unallocated (Source: SMH, March 2016) A non-profit organisa;on established in 2002 Generated over $50 million of investment from philanthropists, trust and founda;ons and government into the social sector Worked with over 80 social ventures and distributed more than $20 million to support their work Delivered $4 million of support through government and cross-sector funded social enterprise programs in ACT, NSW and QLD 18

19 Next steps Build on the founda;on and legacy of the SBB Pilot Seek to enable / facilitate increased private sector involvement Con;nue to engage in dialogue with impact investment experts and stakeholders. Encourage market led proposals on social investment Pro-ac;vely engage with the Impact Investment movement establish a seat at the table Con;nue to educate and work with key stakeholders to build awareness and capability

20 Staying informed Social Benefit Bonds Pilot Program Chris;ne Crain Program Director Website: To receive program updates register your contact details here: