Social Impact Bonds Link to Road Safety Investment
29 July 2015 at 10:33 am
Social impact investing could herald a new era of funding to improve road safety world-wide, and deliver better public health outcomes, according to a new UK report co-authored by a leading Australian impact strategist.
The report by Social Finance and Impact Strategist, two leaders in policy development in the burgeoning “payment for success” Social Impact Bond (SIB) market, argues that private sector financing through a road safety Social Impact Bond framework could bring new funding sources and new rigour to transport in
The funding for the Social Impact Bonds is provided at risk by social investors whose financial return is aligned to the positive social impact of meeting pre-agreed social outcomes.
Report authors are Australian expert, Rosemary Addis, the Director of Impact Strategist and a member of the G8 Social Impact Taskforce, and Jane Newman, International Director of Social Finance – a Not for Profit organisation working with government, the social sector and the financial community to find new ways of tackling entrenched social problems in the UK.
“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,” they said.
The report says more than 1.2 million people are killed and up to ten million seriously injured on the world's roads every year.
The report, Breaking the Deadlock: A Social Impact Investment Lens on Reducing Costs of Road Trauma and Unlocking Capital for Road Safety, was commissioned by road safety and research Not for Profit, the FIA Foundation.
The report claims that significant improvements could be made if the billions of dollars of existing road infrastructure investment was deployed with the priority objective of realising social and financial savings from reduced injuries and fatalities.
“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, [including] 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,” it said.
The report makes a number of recommendations to advance SIB development in the area of road safety and encourages stakeholders including governments, multilateral development banks and financial institutions to support ‘steps to action’ including:
· Identify projects currently in development which could serve as a demonstration of how the social impact investment approach could be applied in the road safety context;
· Design a methodology and toolkit for collection of data, with the aim of filling out the ‘missing piece’ to demonstrate who (for example in health systems or the insurance sector) bears which costs and to build an evidence base relating to particular interventions and outcomes achieved;
Director of the FIA Foundation, Saul Billingsley welcomed the report.
"For too long there has been a disconnect between road and urban transport provision and the effect this expenditure has on public health,” Billingsley said.
“…we need a game-changer, a new way to transparently measure and reward safe and sustainable transport investment. Designing a SIB investment for safer road infrastructure design which pays investors for a successful reduction in injuries would be a win-win for transport and health ministries.
“We are wasting far too much money mending broken bodies in trauma wards when the solutions are available to save lives and make roads safe."
The report can be downloaded from the FIA Foundation website.