Inertia a Barrier to Impact

ESG Investor

The case for allocating to social investment solutions has never been clearer and relevant, according to Big Issue Invest Chair Mark Porter.

The 2024 Joseph Rowntree Foundation poverty survey tells us that 14.4 million people are in poverty in the UK. That’s approximately 22% of the population, a level roughly 50% higher than much of the 1970s. This is more prevalent still in children, with approximately 29% of under 18s suffer from poverty. In single parent families, this is over 40%.

Big Issue Invest seeks to develop investment solutions for institutions which can help alleviate this domestic crisis. Objectively, traditional mainstream investment allocation strategies that prioritise overseas assets cannot tackle UK social issues. Even UK business and investment opportunities in aggregate do little to help tackle UK poverty.

The social impact funds which Big Issue Invest runs directly invest in UK-based businesses and enterprises which tackle the causes of poverty and provide solutions to it. Our investments include one in healthcare services in Cornwall, an idyllic destination for millions of tourists, but also a permanent home to remote and underserved communities.

An investment of £1 million has allowed Smile Together, an employee-owned social enterprise by the Cornish, for the Cornish, to expand their high quality dental services to people who would otherwise have poor or no dental provision. That about sums up Big Issue Invest – investments that help people smile.

Break down the barriers

Big Issue Invest recently hosted asset owners at the House of Lords for Pension and Insurance Spring 2024 social investment event, several weeks before the General Election was called.

This was part of our efforts to provide insurance and pension fund allocators with a blueprint for how to invest in social impact to contribute to better outcomes on UK social issues. The recent first close of Big Issue Invest’s £75m social impact debt fund has provided the framework with targeted intentional impact that institutional asset allocators have been able to subscribe to. The fund seeks to generate positive impact within specific social impact sectors, such as affordable housing and health, whilst also delivering a sufficiently compelling financial return.

While asset owners increasingly understand the importance of social impact investment, they need to break away from the inertia of traditional allocation frameworks in respect of impact and fiduciary duty in the 21st century.

At the social investment event, we heard from senior investment professionals at two global

The full article is available here. This article was published at ESG Investor.