The Australian Financial Review has published a 4-page Special Report on Social Impact Investing in today’s newspaper.
The Report follows a recent roundtable event hosted by Impact Investing Australia’s founding anchor partner NAB, with participation from key leaders in the Australian impact investing space including our co-founder Rosemary Addis and other members of the Australian Advisory Board on Impact Investing.
Offering an excellent overview of impact investment, the Report highlights the opportunities for impact investing to help tackle some of Australia’s pressing social issues, alongside generating strong financial returns for investors.
‘What we’re trying to do with impact investing is make investments that drive positive outcomes, such as better employment outcomes for people who face barriers to getting work, better health or outcomes, or more appropriate housing solutions for people with disabilities. But at the same time, these are commercial investments,” sayds Ben Gales, chief executive of Social Enterprise Finance Australia (SEFA)’.
QBE Insurance’s recent commitment to invest up to $100 million in social impact bonds, where payments are tied to social outcomes, is discussed. “A cold-blooded heartless hedge fund could still find these investments interesting” says QBE’s Chief Investment Office Gary Brader. However Brader reinforces the nature of impact investing extending far beyond serving financial and business interests alone. ‘The emphasis should be on funding social entrepreneurs in getting them funding to make a difference, and only if the government is saving money, then a share of those savings could flow to the investor.”
The Report also highlights the importance of measuring outcomes. As Richard Brandweiner from First State Super puts it: “The model encourages social innovation in a way that expenditure is linked to real outcomes, rather than the traditional model of inputs or outputs”.
‘Measurement of outcomes is the key, Professor Peter Shergold, chancellor of the University of Western Sydney and director of AMP says, because that enables “private-sector discipline to be imposed” on a very government-oriented sector. “The way we do now is that governments see it as expenditure on crisis management. Now when you build that ‘fence at the top of the cliff’, state treasuries will start to see this as an investment in preventing costs in the future – but the social impact sector has to start to measure things properly.”
To read the different articles in the Special Report, click here.