More UK savers could invest for social impact, review finds

The UK’s financial services sector and the government must make a greater commitment to creating a culture of social investment to help the general public get more involved in supporting good causes through their pensions and savings.

This is one of the conclusions of a government-commissioned review of the social investment market published this week entitled Growing a Culture of Social Impact Investing in the UK.

The review was put together by an independent advisory group led by Elizabeth Corley, chair of Allianz Global Investors (pictured above, centre). The group was made up of 60 senior representatives from across the financial industry and social sector. Representatives of the current social investment world include Nigel Kershaw of Big Issue Invest, Caroline Mason of the Esmée Fairbairn Foundation and Michele Giddens of Bridges Fund Management.

The aim of the review was to answer the question: How can the providers of savings, pensions and investments enable people to support the things they care about through their savings and investments?

The review points out that although the UK has been a global leader in social impact investment, with innovations such as the establishment of wholesale lender Big Society Capital and the Social Impact Taskforce during its presidency of the G8, it is now failing to keep pace.

And, although the general public, particularly millennials, are enthusiastic about the notion of social investment, this isn’t reflected in the investments themselves as the social investment market remains underdeveloped. A recent survey quoted in the review showed that more than half of respondents had an interest in social investment, but less than one in ten had already invested.

One reason for the underdeveloped market, the review states, is the "widespread assumption that one can't support social causes and achieve market-rate returns at the same time". It adds: "That assumption is false."

The advisory group state that although there is no ‘silver bullet’, their recommendations are practical and achievable.

Launching the report, civil society minister Tracey Crouch (pictured left), said: “We want people to make investments that reflect their values and have a positive impact on the issues they care about. These recommendations are an important first step.”

Stephen Barclay, economic secretary to the Treasury (pictured right), said: “Social impact investing has the power to make a positive change in society while also bringing positive financial returns. It’s a win-win, which is why demand is growing. The market has enormous potential, but we need to make it easier for people to make a social impact investment.”

The recommendations include ensuring there are more opportunities to invest, producing more communications and PR to raise awareness about social investments, developing better social impact reporting and launching high profile awards to celebrate progress.