Investing in Real Change: Global Steps Forward for Australia

The recent global launch of the Social Impact Investment Taskforce report shows Australia as having the foundations for a thriving, world-leading impact investment sector, writes Australia’s Taskforce representative, Rosemary Addis.

Last week marked a watershed moment in a united effort to transform the way we tackle some of our most difficult social issues and resource the social sector.

On Tuesday, September 16, the Australian Advisory Board on Impact Investing joined with seven of the G8 countries and the EU, to launch an ambitious roadmap to unleash $1 trillion globally towards positive social change.

This global ambition is matched by an audacious, yet achievable, strategy to catalyse a market for investment for positive social outcomes in, and from, Australia.

The launch of the Social Impact Investment Taskforce report was rolled out from 11 Downing Street in London, through to France, Germany, Italy, Japan, the EU, Canada, the USA and Australia.

The Taskforce, established under the UK Presidency of the G8 was mandated with galvanising a global market for impact investments, and its report is a culmination of a year’s work across eight countries. It challenges traditional notions of how we create social value and is coalescing a movement that makes meaningful progress on issues that have challenged governments and communities for a long time.

Impact investments intentionally seek to create a social and/or environmental impact, along with a financial return, and measure both outcomes. It is making a substantial impact, helping community organisations and enterprises increase their reach and deliver improved outcomes in areas from education to employment, health and housing, to sustainable development.

Family Life in Melbourne has financed the purchase of new premises to ground its work in new communities, Eating Disorders Victoria and North Yarra Community Health have financed business development for new revenue streams to support their sustainability, and Team Wild refinanced its tourism business in Far North Queensland to provide employment and training opportunities to young people.  Social impact bonds have enabled the Benevolent Society and Uniting Care to demonstrate the social and financial value of preventative care for children and families.

In Australia, the foundations are there for a thriving, world-leading impact investment sector. Our strong financial markets (including the fifth largest superannuation funds globally), combined with a generous culture, and the entrenched notion of an Aussie ‘fair go,’ provide the building blocks for the sector. As Sir Ronald Cohen, Chair of the Social Impact Investment Taskforce impressed when visiting Australia in May this year, “you’ve got a set of cultural values and institutional forces that make the country very ripe for tackling social issues. So I think Australia should become one of the leading countries in the impact investment space”.

The Australian Advisory Board on Impact Investing has led Australia’s contribution to the Taskforce effort and delivered a clear action-oriented strategy for how we can build the movement here, and be competitive globally: Delivering on Impact: The Australian Advisory Board Breakthrough Strategy to Catalyse Impact Investment.  ‘Delivery’ is the clear intention of the strategy, with a focus on:

• Leadership: to drive the market, including developing prototypes and a common language for the sector;

• Action: to demonstrate what can be achieved through dedicated working groups on capital growth, outcomes and innovation, and market making; and

• Policy: to support the development of an enabling environment for impact investing.

The focus on action and results is reinforced with flagship initiatives, including a $350 million social investment fund, as well as capital to help prepare social organisations for incoming investments and growth.  Working groups bringing together highly capable leaders with the right mix of experience to deliver, will be out of the blocks in coming months with a mandate for implementation.  The call to action is already being taken up with National Australia Bank committing $1 million in funding for the enterprise development initiative and QBE demonstrating availability of capital with a $100 million commitment to social impact bonds over the next three years.

The Taskforce encourages us to be bold: “Nothing less than a revolution is needed to improve the lives of millions who are being left behind,” and supports that with clear recommendations. Bringing to life the opportunities impact investment promises begins with supporting and showcasing the tremendous work already underway here in Australia, from the grassroots to the big end of business.

Support from across sectors was evident at the launch.  NSW Treasurer, Andrew Constance, provided the opening address, reinforcing government’s need and willingness to engage. Louise Walsh, of Philanthropy Australia, emphasised growing interest and potential for the philanthropic sector.  Michael Traill, Chair of GoodStart Early Learning and Paul Steele from Donkey Wheel, reinforced the track record and growing interest from the social sector for impact investing projects large and small.

The rapid ascendance of interest in impact investing reflects an expanding demand in Australia, and across the globe, to invest in prosperous economies and societies. As the global Taskforce report states, “by bringing a third dimension, impact, the 20th century capital market dimensions of risk and return, impact investing has the potential to transform our ability to build a better society for all”.

We are inviting leaders from across the Not for Profit , public and private sectors in Australia interested in innovative approaches to the issues we face to join us and, as a society, make  this shift towards doing good at the same time as doing well.

About the Author: Rosemary Addis represents Australia on the Social Impact Investment Taskforce and Chairs the Australian Advisory Board on Impact Investing and Impact Investing Australia  Impact Investing Australia is a Not for Profit organisation established in early 2014 in response to an industry-identified need to provide leadership, demonstrate demand, and remove barriers to market and product development of impact investment in Australia.

It supports Australia’s participation in the Social Impact Investment Taskforce and the work of Australian Advisory Board on Impact Investing. For copies of the reports and more information see: www.impactinvestingaustralia.com