Global insights and government support for impact investing

Global insights and government support for impact investing

Message from our CEO  

Welcome to our latest quarterly update. It has been a productive few months for the IIA team and we’re pleased to share news of our latest work in progressing the shift in investment towards improving social and environmental issues with measurable outcomes.  Earlier this month, I had the opportunity to connect with colleagues from around the world at the Global Steering Group for Impact Investment’s leadership meeting, gathering ideas and learning about best practice that will serve as valuable insights for our work here at home.  It is an exciting time for impact investing in Australia, with May’s federal budget announcing initiatives that will further the momentum. The budget’s new measures will help us get closer to impact investments that are of thescale needed to deliver significant social impact.You can read our thoughts on this, and more, below. 

Best wishes

David Hetherington, CEO
Impact Investing Australia

Global meeting of impact investing leaders 

David Hetherington was among 150 impact investing leaders from 50 countries that met in Istanbul earlier this month for the Global Steering Group for Impact Investment (GSG) leadership meeting. IIA is Australia’s representative on the GSG, a network of 36 member countries bringing together experts in the fields of investment, public policy and social and environmental innovation to facilitate the development of impact investing. 

The meeting hosted inspiring keynotes, including Sir Ronald Cohen sharing his insights on impact-weighted accounting (you can read more here in his May interview with Impact Investor), impactful discussions and valuable workshops, including David Hetherington’s presentation on payment by outcomes. The event also enabled face-to-face meetings with our South East Asia, Oceania and MIKTA (Mexico, Indonesia, Korea, Türkiye, Australia) colleagues.  MIKTA is a cross-regional group of the five G20 member nations that values collaboration to bridge divides between developed and developing nations and builds consensus on issues that are relevant to all regions. The MIKTA team developed a roadmap for the second half of the year and will report (by year-end) on the status of impact investing in the five countries, the key challenges and opportunities locally, and outline a set of recommendations for policymakers (to be proposed considering the diversity of the group and the state of development in each country). We will keep you updated on this in future newsletters.

MIKTA group shot
IIA CEO David Hetherington (centre) with MIKTA colleagues.

Government support for impact investing

Investor Roundtable

Following the release of last month’s federal budget, we welcomed the Government’s commitment to further exploring impact investing. In response to recommendations by the Social Impact Investing Taskforce, the Government will convene an Investor Roundtable to discuss how to unlock private capital to support social impact investing initiatives. We look forward to participating in the Roundtable and continuing our dialogue with the Government.

Social enterprise development initiative 

The budget announced $11.6 million in funding for a Social Enterprise Development Initiative, to help social enterprises access capital and scale through capacity-building grants and online mentoring and education. This builds on the critical, early work of the Commonwealth’s Social Impact Investment Sector Readiness Fund, which we have been pleased to help facilitate through our Growth Grant program.

Outcomes Fund

In another impact-related initiative, the Government announced a $100 million Outcomes Fund that will make payments to service delivery organisations according to the measurable outcomes they achieve, while enabling them to attract additional private capital to tackle social disadvantage. The Fund will enter into outcomes-based contracts with non-profits and social enterprises that have a deep understanding of local disadvantage and proven track records in addressing it.

Emerging Markets Impact Investment Fund

The budget also announced a $210 million expansion over four years to expand the Emerging Markets Impact Investment Fund (EMIIF) – from $40 million to $250 million – to provide financing for small and medium enterprises operating in the Indo-Pacific and support the mobilisation of private and multilateral finance for development outcomes. IIA has long advocated for an outcomes fund – in our budget submissions and in the recommendations from the Social Impact Investing Taskforce, which comprised five members of our (current) Board. We’ve also strong supported impact investing from Australia specifically towards addressing the Sustainable Development Goals in emerging markets (including through the EMIIF). 

These federal budget measures are part of a range of initiatives that offers Government a way to build an inclusive economy, use public resources more efficiently and alleviate the drain on the public purse.  

Our Growth Grant program’s impact on the ecosystem

We are currently undertaking a significant project to identify and assess the measurable impact of our Growth Grant program on the impact investing ecosystem. Funding (since 2018) from the Department of Social Services’ (DSS) Sector Readiness Fund has delivered Growth Grants valued at more than $6.7 million, assisting 69 social enterprises. As a result of the program, grant recipients have successfully raised over $70 million to scale their business and their social impact.

Our assessment of the Growth Grants includes the impact on not only social enterprises, but also the intermediaries who supported them (with services such as business, financial, legal and other capacity building advice), the investors who backed them, and the social enterprises’ beneficiaries (i.e. those who have benefited from the social impact).

We anticipate our report will provide a valuable resource for further funding from DSS, such as capacity-building grants allocated through the new Social Enterprise Development Initiative.

Global impact investment event of the year

We are looking forward to attending the Global Steering Group for Impact Investment Global Impact Summit 2023 in Malaga on 2–3 October. This year’s Summit will see 1,000+ impact leaders, investors, philanthropists, businesses, entrepreneurs, banks and policymakers exchange ideas and plan how to replicate innovative best practices at scale in three areas: 

  1. Mobilising capital for people and planet, where it is most needed 
  2. Achieving full transparency in measuring impacts 
  3. Accelerating impact and social economies – innovative strategies for positive impact

This year’s line-up of speakers include: Cilia Holmes Indahl, CEO of EQT Foundation, Emmanuel Faber, Chair of the International Sustainability Standards Board (ISSB), and Ibukun Awosika, Chairperson & Founder of The Chair Centre Group, Nigeria.

Collaboration between Australia’s largest foundations

IIA is pleased to welcome a new alliance between some of Australia’s largest philanthropic foundations to help grow impact investing in Australia. The recently launched Foundation Group for Impact Investing (FGII) will bring foundations together to share practice around impact investing, and streamline the process for social enterprises and other for-purpose organisations seeking investment finance.

Philanthropy Australia will act as the group’s independent secretariat, alongside founding members who include: Paul Ramsay Foundation, Macquarie Group Foundation, Lord Mayor’s Charitable Foundation, English Family Foundation, Westpac Foundation, UBS Optimus Foundation Australia, Minderoo Foundation, Hand Heart Pocket the Charity of Freemasons Queensland and The Snow Foundation.

Free online ESG course

If you are interested in learning how to improve your organisation’s practice of impact measurement and management, and align your ESG or impact activities and reporting with emerging global standards, check out Duke University’s Impact Measurement & Management for the SDGs course. The course (developed in collaboration with the UNDP) was recently rated the top Coursera ESG/Sustainability course. Our Board Director, Fabienne Michaux (part of the UNDP team) was instrumental in developing the course content and its foundational skills in impact measurement and management.

SDG Impact Standards Train-the-Trainer course 

The SDG Impact Standards, developed by UNDP SDG Impact, provide a universal framework and management approach for advancing sustainability and the SDGs among businesses, investors and policy makers. A Train-the-Trainer course is now being offered to those who are keen to obtain the knowledge and skills needed to be Accredited Trainers for the SDG Impact Standards. Over the course of 16 hours, attendees will learn how to successfully deliver the Accredited SDG Impact Standards Training materials to businesses and investors. The Train-the-Trainer course will cover:

  • How to make the ‘business case’ for sustainability
  • An overview of the SDG Impact Standards and the underpinning key concepts
  • How to introduce the Self-Assessment Tool and the 12 Enterprise Actions
  • The pathway to the SDG Impact Seal
  • Key case studies
  • Workshops and interactive discussions
  • Preparation and support to prepare trainees for their assessments