UK based charity FIA Foundation, Social Finance UK and Australian social innovation consultancy Impact Strategist have launched a new report calling for social impact investing to be used to help alleviate the growing problem of road accidents and the cost on public health.
The report argues that private sector financing through a road safety social impact bond framework could bring new funding sources and new rigour to transport investment.
According to the report, approximately 1.2 million people are killed on the world’s roads each year with an estimated cost of 2 to 3 per cent of global GDP. Coupled with annual serious road injuries exceeding 10 million and projected road fatalities of 2 million by 2020, the social and economic consequences are so significant that road safety has been recognised in the UN-sponsored Decade of Action for Road Safety and the draft Sustainable Development Goals as a priority public health issue.
The report explores how funding and finance can be directed to more consistently create safe systems, rather than relying on just maintaining road infrastructure and meeting road trauma costs.
Social impact options tabled by the report include asset backed structures (for example, a focus on improving the physical infrastructure of a road or road network), outcomes based mechanisms (for example, coupling a social impact bond or payment for success model with project finance or public private partnership arrangement), and direct investment in service providers and other organisations supporting the system.
The report outlines how structuring social impact bonds with clear metrics measuring the effects of road safety policies – such as safe infrastructure design or enforcement campaigns – on specific health outcomes (e.g. reduction in number of hospital bed-days relating to road traffic victims) could ‘break the deadlock’ of decades of transport policy and planning divorced from consideration of public health outcomes.
Report authors Rosemary Addis, Director of Impact Strategist (and Chair of Impact Investing Australia), and Jane Newman, International Director of Social Finance UK, comment that:
“Social impact investing provides an exciting option to ‘unlock’ the benefits of improving road safety. This work sheds light on who bears the cost now and the incentives to invest in prevention rather than dealing with the consequences of road trauma which affect millions of people around the world.”
Core ‘steps to action’ recommended in the report include:
- developing targeted case studies to better understand what the existing data can tell us
- identifying current projects to demonstrate how the social impact investment approach can be applied in the road safety approach
- designing a methodology and toolkit to collect the information needed to engage appropriate stakeholders
- gaining multi-stakeholder commitment and resources to developing the evidence base
- developing a road map to progress with models and options to deliver ‘Safe System’ change at scale.