Big Society Capital’s latest strategy reveals how it hopes to help double the size of the UK social impact investing market by 2025.
On the eve of its tenth anniversary, social impact investing firm Big Society Capital has today launched its latest organisational strategy, which reveals its vision for helping to at least double the UK social impact investing market by 2025.
It comes at a critical time for the social impact investment sector, with the pandemic highlighting the need for significant funding to address entrenched social challenges. The UK 2070 Commission estimates that the UK Government’s “levelling up” plans carry a £1 trillion price tag, while Crisis data shows the cost of ending homelessness by 2041 is over £19 billion. With the cost of responding to Covid-19 increasing government debt and putting public finances under pressure, the Government faces challenging circumstances in responding alone.
Big Society Capital aims to support the size of the market in growing to between £10 to £15 billion by 2025. This is double its latest figures, which estimated the size as £5.1 billion at the end of 2019.
The strategy reveals that Big Society Capital will focus its efforts on investing in and attracting new capital across four priority investment areas: impact venture, social lending, social outcomes contracts; and social and affordable housing. This is a consolidation of the firm’s existing work in these markets – for example, it has played an active role in supporting the social and affordable housing market in growing from its infancy 10 years ago to now being worth more than £2 billion; while in the impact venture space its capital has reached 130 startups.
In addition, Big Society Capital will continue to work with partners in the innovation strand of its work – where it works with frontline organisations and investors to create new social impact investment solutions. It will also build on its experience and expertise in launching the Schroder BSC Social Impact Trust, which offers investors on the London Stock Exchange high impact investments contributing to solutions to social challenges for the first time.
From being set up with £625 million from dormant bank accounts and four high street banks in 2012, Big Society Capital has now committed £780 million alone – and £2 billion alongside partners – to supporting more than 1,500 social enterprises and charities. The latest strategy groups the social challenges being tackled by this capital under four new headings: housing, financial inclusion, health and wellbeing, and community resilience.
In the strategy, Big Society Capital recognises that it is just one part of a wider social impact investment ecosystem made up of social investors, fund managers, advisers and frontline organisations – and that it can only achieve its goals of growing the market through continuing to work in partnership. Big Society Capital welcomes new partners and urges anybody interested in social impact investment to get in touch about how they might be able to join the growing movement and work together.
Stephen Muers says: “Big Society Capital is proud to have supported the social impact investment market in its recent successes – from growing from £830 million in 2011 to £5.1 billion in 2019, to staying resilient amidst months of uncertainty. We have been inspired by the incredible work done by both investors and frontline organisations to continue supporting communities that have needed it the most during these challenging times. I am thrilled that Big Society Capital can play a part in driving the next stage forward – where we are confident that both social and financial impact will be able to scale even more quickly and effectively, in turn improving more lives.
“It is an extremely significant time for social impact investing. The pandemic has highlighted the need for sources of capital to address entrenched social challenges and inequalities. We are seeing more investors than ever – from individuals to private institutions and public bodies – wanting to achieve social impact alongside financial returns. Big Society Capital has an important role to play in seizing this opportunity as we build on our track record of supporting the market – and we look forward to working with partners to take this movement to the next level.”