The UK government has played a critical role in supporting the social impact investment market since the early 2000s, from setting up Better Society Capital to supporting the creation of the Impact Investing Institute. More recently, the Financial Conduct Authority published their brand-new Sustainability Disclosure Requirements, including the UK’s first regulated impact investing label.
Social enterprises (for-purpose businesses) are among key recipients of impact investment. The UK has also nurtured a robust social enterprise sector and developed the capacity of these businesses to receive investment. This has been in the form of legislation to define a social enterprise, financial support and the establishment of capacity builders for the sector such as Access Foundation.
As a global financial hub, London provides a large pool of investors and capital. Social investors, private equity and venture capital firms and foundations are some of the leading impact investors in the market, while institutional investors (such as pension funds and banks) have been identified as primary drivers of future growth.
Over 20%
of the 250 social impact bonds launched in the world have been launched in the UK
Businesses with a product or service delivering a social or environmental outcome, despite not being mission-driven businesses, also receive impact investment. There are significant investment opportunities in impactful projects and activities in the UK, and this is also set to grow.