‘Impact investing not just investing with impact’

The chairman of Big Society Capital and The Portland Trust, told delegates at a special event held at the FT Offices today (16 October) that sustainable and ethical investment was not just a trend but a “game changer”.

At the event, marking National Ethical Investing Week, Sir Ronald said: “I cannot stress enough how important it is to tackle social issues.

“Goverment have been throwing their hands up in despair as no matter how much money governments pour into social enterprises, it has not seemed to make a difference. The welfare state cannot support such schemes, nor can the charities sector.

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“However, investing in social impact bonds is becoming a way to unlock the balance sheets of pension funds, charitable foundations, insurance companies, high net worth individuals and philanthropic foundations alike.

“By connecting a social performance - such as reducing the likelihood of young people re-offending and entering the prison system a second time - to a financial return, we have given social enterprises access to the markets.

“Likewise we have given investors with deep pockets something that provides them with profits, with a purpose.”

Stating that “not everything that counts can be counted”, he added that social impact bonds - in which the UK is a clear leader, with 13 such investment products to date - could forge the way for investors to put money back into the organisations that effect social change for the better.

He concluded: “We need to have impact investment, not just to invest with an impact. This social good, this quid pro quo investment, this way of funding bonds that gives something back to society as well as boosting enterprise - this could be as big as tech was.”