The UK government said it will work with the country’s investment and savings industry to help launch social impact investment funds. It also said it plans to encourage more investments in disadvantaged areas, and to create “investment opportunities that address social challenges, while also creating financial return.”
The initiative is in response to a report compiled by senior representatives from the investment industry, and chaired by Elizabeth Corley, vice chair of Allianz Global Investors. It highlighted the need to support and promote the social and environmental responsibility of businesses across the UK.
“People increasingly want to see their savings and investments to have a positive impact on society, as well as bring financial returns,” Tracey Crouch, minister for Sport and Civil Society, said in a release. “By utilizing the wealth of experience within the financial services industry, we can expand social impact investing to help build a society that works for everyone.”
In 2016, the UK government appointed Corley to lead an industry-led advisory group that looked into ways to foster a culture of social impact investment and savings in the country. The report, which was published in November, recommended ways to improve deal flow and the ability to invest at scale; strengthen competence and confidence within the financial services industry; develop better reporting of non-financial outcomes; and make it easier for people to invest.
The Pensions and Lifetime Savings Association (PLSA) welcomed the government’s social impact investment drive.
“Impact investing is the fastest-growing area of responsible investment,” said the PLSA’s Caroline Escott in a release. “With their long-term investment goals, and £2.2 trillion ($2.92 trillion) of assets under management, pension schemes are particularly well placed to have a positive impact on the economy and society through their investments.”
The UK’s Department for Work and Pensions will launch a consultation next week, which will clarify rules on social impact, and environmental, social, and governance (ESG) investing.
“Social impact investing is a relatively new, yet rapidly developing investment strategy. Therefore, investment professionals need the relevant educational tools and guidance to develop the expertise that allows them to best serve their clients’ interests and needs,” said the government in its response to the advisory group report. The “government’s ambition is to ensure that consideration of social and environmental impact becomes part of ‘business as usual’ in the British economy.”
Tags: ESG, Pensions and Lifetime Savings Association, Social Impact Investment Funds, UK