Social impact investors demonstrate ‘stability’ as market hits £10bn
Britain’s social impact investment market has “once again” grown, as investors show confidence within impactful investments, a new report has revealed.
According to an annual assessment by one of the UK’s largest impact investors, Better Society Capital, the social impact investment market jumped seven per cent in 2023 to £10bn, up from £9.4bn in 2022.
The growth highlights the continuation of investor support in areas focused on tackling social issues, including the reduction of child poverty, homelessness and long-term health conditions, despite economic uncertainties.
It comes during a time when the new Labour government holds economic stability and growth as a priority, which Stephen Muers, chief executive of Better Society Capital, believes to be a “perfect opportunity” to “shape” more initiatives.
Muers said: “As we look to the future, it is crucial for investors, businesses, and the government to work closely together to channel investment towards organisations that need it.
“With the Labour government’s focus on growth we have a unique opportunity to shape policies that encourage more capital into impactful projects that benefit society, ease the burden on the treasury and support the economy.”
The report also estimated the investor composition of last year’s market, which highlighted what areas active investors have been investing in.
Pension funds were revealed to provide 21 per cent of investment, including a strong focus in social and affordable housing. This was closely followed by endowments and charities, which provided 14 per cent of investment.
Better Society Capital believes the pension sector’s performance will provide “valuable” input for policy discussions ahead of the government’s review of the pensions landscape this Autumn.
Stephanie Peacock MP, Parliamentary Under Secretary of State for the Department for Culture, Media and Sport, said: “We look forward to continuing this legacy by championing the growing impact investment sector, who harness the innovation and entrepreneurship in our country and direct it towards a common good.
“From assets of community value to cooperatives – we want to see more projects being funded where they are needed most.”