We each have a choice in the kind of Australia we want to live in and the kind of country we want to leave to our children and their children. We can choose to work through the hard issues today or we can leave others to do the heavy lifting for us in the future.

When Australia steps up to a challenge, we make an impact globally. We demonstrate a level of excellence, a dynamism and an ability for creative problem-solving that attracts the top practitioners, companies, policy makers and others to work with us. Australia’s role in the international effort to develop impact investing is no exception.

The Social Impact Investment Taskforce – established under the UK Presidency of the G8 – was formed two years ago, with a remit to do nothing less than catalyse a global market for investments that deliver a measurable social outcomes and a financial return, and to identify what can be done to grow the market.

Australia is not part of the G8. But the excellence, commitment, and breakthrough thinking and practice from here earned us an invitation to participate in this bold experiment. I was delighted and surprised, to receive an invitation to contribute. Australia was the only country outside what is now the G7 to receive such an invitation. At the time, some here weren’t sure how to respond. For me the answer was clear, and binary. We take this opportunity to join the global conversation and create a virtuous cycle that will help us and others move faster to develop more ways and resources to tackle the challenges faced by society – or we don’t. Saying yes required a significant commitment of time, energy and resources. Saying no wasn’t an option.

We said yes, and it has been an absolute privilege to participate in this work led by Sir Ronald Cohen, with an outstanding group of leaders representing the sector and governments from the G7 countries and EU.

In its first year, the Taskforce effort brought over 200 leaders: some focused on the local experience and ecosystems of participating countries; others bringing their expertise to cross-cutting issues such as measuring impact, asset allocation, international development and mission. They, in turn, engaged with an even greater number and range of impact investment practitioners, social entrepreneurs, policy makers, investors and philanthropists to inform the work.

Australia has engaged wholeheartedly, bringing the depth and quality of our local experience to the Taskforce. Leaders from our social innovation and investment spheres, and from the social sector, philanthropy and corporate and financial sectors have joined with me to deepen Australia’s participation. The Australian Advisory Board on Impact Investing was established last year and has made a significant contribution to the Taskforce effort, providing a focal point of leadership for building the market in and from Australia.

The Taskforce has delivered not only an integrated set of reports, but a collective vision for what a thriving global impact investing market should be that delivers vastly better outcomes for people, communities and our environment.

Central to achieving this are a number of key recommendations including:

  • A paradigm shift in capital market thinking beyond the two-dimensions of risk and return, to encompass a third dimension, impact
  • Removing barriers to mobilise institutional and other sources of capital
  • Support for entrepreneurs tackling social issues so they can attract investment
  • Identifying key institutions and infrastructure needed for all local markets to support impact

No single action will be the panacea. The market for impact investments in any country or globally will not emerge fully formed. We have to take active steps to develop it. Critically, governments must play an important enabling role as they do and have done for other markets. There is ample scope for governments to draw upon experience in supporting economic innovation and entrepreneurship. Australia knows how to do this: we know how to enable and catalyse new markets, enterprise and innovation.

Australia has benefited significantly from being part of the Taskforce work. The Australian Advisory Board’ strategy Delivering on Impact has applied many of these high-level global recommendations, and adapted them to reflect our local structural, cultural and philosophical underpinnings. The strategy includes a number of elements – including creating a flagship Australian Social Impact Fund as a pivotal institution to champion the market – that have now been identified globally as lynchpins in the market to take impact investment to a tipping point. Over 50 senior Australian leaders are engaged in implementing this strategy.

Our Chair, Sir Ronald Cohen speaks often of creating a revolution in the way we tackle social issues.   We know that governments cannot pay for everything; and we know that philanthropy cannot fill all the gaps. Civil society cannot be strong without resources and capacity to attract talent. A growing number of entrepreneurs focused on social purpose and tackling social issues also need finance to develop and grow. An increasing number of investors are actively looking for options that make a difference, or at least do no harm as well as do well financially. The Taskforce reinforced that these shifts are occurring across countries, political systems and cultures. And that the opportunities and challenges ahead reflect far more in common than they do apart.

A number of other countries have already followed the lead of the Taskforce to develop National Advisory Boards, and are testing or applying our recommendations for their circumstances. At the recent plenary meeting of the Taskforce in London I chaired a session on taking the global market beyond the G8 and it was inspiring to showcase the leadership and developments across countries as diverse as Brazil and South Africa, Israel and India, Portugal and Mexico.

But interest spans the globe – a pilot online platform creating a cross-sector network of practice that I have led together with the UK Cabinet Office, IIPC and the World Economic Forum had engagement from 25,000 people from over 145 countries in 2014 alone.

What happens next matters a great deal. Leadership will be key to embedding, testing, sharing and expanding the insights within and across countries.

Effective 1 August, the ‘G8 Taskforce’ has been succeeded by a Global Steering Group that is welcoming new countries that want to join the next phase of endeavour towards a thriving global market.

Sir Ronald is continuing as Chair for the first year and is likely to be supported by a broader executive including Vice-Chairs and a CEO. Australia has a seat at the table as a result of our role in the Taskforce. Other countries will be admitted by application; at least six countries have applied and new members will be determined at the first meeting of the Global Steering Group mid-August.

The Australian Advisory Board on Impact Investing has also reaffirmed its commitment to leading the market development and providing a point of engagement with the global effort and with Governments beyond its initial two year term, and has commenced a process to evolve its role and strategy over the coming six months.

We are looking forward to continuing to working with many of you and welcoming others to grow this market where finance helps build a healthy society, enables equality of opportunity and ensures that people affected by social issues aren’t left permanently behind.

Rosemary Addis is the Chair and co-Founder of Impact Investing Australia, the Chair of the Australian Advisory Board on Impact Investing and the Australian representative on the Global Social Impact Investment Steering Group (previously the Social Impact Investment Taskforce).

 

Image courtesy of Emily Orpin