On 16 September, leaders from Australia’s business, finance, government, philanthropic and community sectors came together at Customs House in Sydney to launch a report that maps a bold strategy to tackle some of our most pressing social issues through impact investing.
The Australian Advisory Board on Impact Investing’s Breakthrough Strategy, ‘Delivering on Impact’, targets growth for the impact investing market in Australia.
Over the next decade, the market for impact investments is estimated to be valued at A$32 billion within Australia alone, and between US$500 billion to US$1 trillion globally. The Australian Strategy focuses on delivery through leadership, policy and action. Working groups are already being brought together to progress initiatives, including a $350 million social investment fund.
“Australia is at the vanguard of efforts to catalyse a global market for investments that have the potential to create real benefits for society,” said Rosemary Addis, Australia’s representative on the Taskforce and Chair of the Australian Advisory Board and Impact Investing Australia. To read Rosemary’s opinion piece appearing in the Sydney Morning Herald on the day of launch click here.
At the launch event QBE announced that it is keen to play a leading role in the development of Social Impact Bonds globally, and to this end, intends investing up to $100m over 3 years into suitable impact bond opportunities across QBE’s global investment portfolio.
National Australia Bank also announced a $1 million fund to support organisations in delivering finance solutions for important social issues, and called for the finance sector to play a major role in addressing the significant growing social and environmental challenges facing Australia.
The Strategy is part of a global effort led by the Social Impact Investment Taskforce, established when the UK chaired the G8 in 2013. The Taskforce, on which Australia is one of eight country participants, launched its global report on Monday highlighting the critical role of governments in growing and participating in the market.
Recent debate over the Federal Budget highlights the limits on public resources. At the same time, there is a heightened focus on how private sector resources can contribute to positive social outcomes in key areas such as aged care, health, housing and education.
Impact investing is a growing field of investment that intentionally creates positive social impact as well as a financial return, and measures both.
“This is not a simple redirection of responsibilities and capital. It is an opportunity to transform our approach to social issues, and open up new avenues for innovation that grow economic as well as social value.”
Sir Ronald Cohen, Chair of the Taskforce, said: “I have high expectations for Australia with this strategy. It is staking its position as one of the leaders in the impact investment space.”
Peter Shergold AC, Chancellor of the University of Western Sydney and member of the Australian Advisory Board, said: “This strategy is a clarion call across all sectors – we need to collaborate and innovate to achieve better outcomes for society.”
Notable Australian impact investments include: GoodStart Early Learning; the Social Benefit Bonds in NSW; and Leapfrog Investments’ microfinance and insurance funds.
Steve Lambert, Executive General Manager of Debt Markets at National Australia Bank, and member of the Australian Advisory Board, said: “There is a fundamental shift underway in how we address the challenges facing Australia. Impact investing has financed initiatives in childcare and education, and financial inclusion.”
QBE’s Chief Investment Officer Gary Brader said: “There is a growing sense of potential for impact investing and we intend to play a leading role to bring it to fruition by building a portfolio of social impact assets.”