What is the government’s social impact investment drive?

15/07/2018 10:17

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Investing with a consideration for more than just profit has been a growing trend over the last decade in the UK and globally. Now the government is stepping up to further strengthen the culture of social impact investment and for businesses that have a positive social impact with their operations, it could represent a capital boost. 

Impact investment doesn’t mean forgoing profit. It simply means combining profit with having a positive impact on some aspect of society or the environment. It could mean supporting businesses that work to bring educational projects to life in local communities or backing a firm that’s pioneering the way with sustainable energy solutions. Impact investment is all about achieving a double bottom line – generating profit while doing good too.


In the last decade, social impact investment has grown hugely. It started as a niche idea but it’s one that’s grown as more investors are keen to see their money have a positive impact, whether they have thousands invested through funds or a small pension pot. It’s led to institutional investors, pension funds, and more getting on board with the ethos. According to statistics from Big Society Capital, the social investment market in the UK alone was worth £2 billion at the end of 2016, a 30% increase on the previous year.

So, what it the government’s initiative? The social impact investment drive aims to bring social impact investment into the mainstream. Working across five key recommendations, the goal of the drive is to make it easier for people to invest their money in the issues they care about, whether that’s healthcare, education, affordable housing, community projects, or any other social issue. Core to growing the social impact investment market is the government’s commitment to working with the wider financial industry, using the skills and experience of the sector to push plans ahead.

It could soon be standard to invest in a way that addresses modern social challenges while still generating a financial return.



What does it mean for businesses?


For businesses that have a social mission, the drive could represent an opportunity to tap into more investment and access further financial support. Being a social business doesn’t mean that you don’t generate a profit. They still operate in the same way as a normal business would, they simply promote social and environmental responsibility. If you’re a property developer that’s pushing boundaries with creating affordable housing in disadvantaged areas or you’re offering exceptional standard care service to meet the growing demand of an ageing population, for example, you could benefit from the focus on social impact investment. 

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