Impact investment can't become the tail that wags the dog

With less than one week to go until the Social Enterprise World Forum (SEWF) takes place in Milan, chair of the event's steering committee Peter Holbrook CBE sets aside some time to get across his views on important issues in the sector and the impact SEWF has had to date. 

Peter Holbrook CBE

Peter Holbrook CBE. Photo credit: Social Enterprise UK

Pioneers Post: In what ways has the Social Enterprise World Forum (SEWF) acted as a catalyst for positive change in the social enterprise sector? 

Peter Holbrook: We’ve seen a range of initiatives and policy developments occur as a direct result of the SEWF taking place in a particular country or city: a new $1bn social investment fund was announced in Alberta, Canada as a direct result of the SEWF taking place in 2013. In Rio di Janeiro a number of leading companies were introduced to local social enterprises and those partnerships ignited by SEWF remain today. 

Perhaps most encouraging, is the way in which the SEWF helps to cross pollinate supportive public policy for social enterprises. We’ve seen the Social Enterprise Promotion Agency established by the Korean government, new investment funds emerge, social value policies being developed or revised...the list is endless. Although, as ever, cause and effect are sometimes difficult to prove. SEWF certainly helps to maintain the momentum and the profile of the growing global movement.

PP: To what extent does the development of the social enterprise sector depend on the level of support both governments and corporations provide it with around the world?

PH: Social enterprise, as a market based approach, of course needs a benign environment to succeed, and that benign environment is driven by customers that want the goods and services that social enterprises have to sell. In both cases, the public and private sectors have a critical role to play.

Sometimes you can survive with the support of just one or the other – and the sector has at times done just that – the growth, innovation and impact really happens when the sector can gain support and custom from all markets; B2B, B2C and public sector. Of course governments have a huge role in shaping markets through legislation and regulation, as well as having a public benefit mission and spending billions of tax receipts. On balance I think government can and should do more.

PP: In which countries do you think legislation is having the greatest impact in helping to promote social enterprises?

PH: I think the UK is widely regarded as the most supportive environment, specifically in terms of public policy that has emerged over nearly two decades. Scotland is well ahead of England and Wales with a very pro social range of commitments policies and initiatives. Outside of the UK, South Korea is worth taking a look at, Canada is rapidly progressing an agenda and the whole of South East Asia is very exciting right now. In terms of policy, Europe is desperately attempting to catch up but has struggled to deliver anything meaningful despite numerous attempts to do so.

PP: This year’s SEWF programme tackles some of the most pressing issues facing Europe including affordable housing shortages and issues facing developing countries around the world including health and human rights. In which sectors do you think social enterprise is going to have the greatest impact in the next decade?

PH: Well my hope is obviously that we'll see social enterprises increasing market share across all markets but the ones that I think will be most fertile are in health and social care where demographic shifts and financial constraints are severe. Education and skills are well suited and are already growing well and community renewable energy will, if given the chance, grow exponentially. Food and agriculture is another area performing well.

PP: Is impact investment going to radically change the way in which international development is funded? 
PH: I hope not. There's a great deal of excellent work already underway. Impact investing should further support this work, complement it and help to expand it, rather than to fundamentally redesign it so it works better for financiers and investors. Impact investing of course has its place and provides exciting new opportunities but we are at risk of focussing on and getting too obsessed with the means to the end rather than the end – the eradication of poverty and building economies based on shared prosperity and environmental sustainability.

Impact investing will certainly play an increasing role but impact investment must not become the tail that wags the dog. In the excitement and amidst the hyperbole we need to remember that not every circumstance or indeed crisis is fit for making a financial return here in the UK or anywhere else.


The Social Enterprise World Forum (SEWF) was developed and first launched by CEIS – a leading authority in the social enterprise sector and the largest Third Sector business support provider in Scotland. This year the SEWF has been organised by ACCRA-CCS and will take place between the 1st and 3rd of July in Milan, Italy. To find out more, click here.

Photo credit: John Flickr