Advocates say WA is ripe for impact investing

Impact investing is yet to gain traction in Western Australia, but a new cross-sector alliance is looking to change this by building the state’s impact investment market from the ground up.

The Impact Investment WA Alliance (IIWA) – launched earlier this month – aims to develop policy recommendations for government, improve the standards of impact measurement, and educate the wider community about the benefits of impact investment.

Advocates say WA is ripe for impact investment opportunities. It houses Lotterywest – Australia’s only remaining public owned lottery – which offers $300 million a year in grants.

Australia’s largest native title settlement of $1.3 billion covers WA’s entire south-west, providing opportunities for Aboriginal impact investment.

WA also has Australia’s richest resource sector – valued at $100 billion a year – which can be used for social impact bonds and direct impact investment through corporate foundations.

Sven Stenvers is co-founder of Impact Seed, the organisation leading the IIWA. He told Pro Bono News the purpose of the alliance was to bring different sectors together to develop an impact investment market that was currently “nascent at best”.

“When we look at best practice from other states, we see that New South Wales is very focused on social impact bonds, while Victoria has taken more of a grassroots social procurement and social enterprise route,” Stenvers said.

“And I think the good thing about WA being a nascent market is that we can develop something that’s holistic, that ticks all those boxes rather than being siloed.

“We’re not going to say our vision of impact investment is just social impact bonds or social enterprise. We can cover the whole remit.”

Stenvers said the WA government had shown an appetite for impact investment coming off a fairly low knowledge base, proving that education was key to IIWA’s success.

The alliance was launched by WA Treasurer Ben Wyatt, who said impact investing was an opportunity for the government to take a fundamentally different approach to addressing their priorities as a state.

Stenvers said with the right support, impact investment could address some of WA’s most pressing social and environmental issues through business investment.

“These could range from employment-based social enterprises which can support people suffering disadvantage, such as long-term unemployment and disability, through to regenerative agriculture projects in partnership with Aboriginal corporations,” he said.

“[These projects] have the capacity to transform WA’s $8 billion agriculture sector, and our food system into the state’s largest carbon drawdown project.”

The Centre for Social Impact UWA is also part of the alliance, and director Paul Flatau said IIWA would help catalyse the development of impact investment in WA.

“Impact investing funds have the potential to significantly expand the pool of finance that can be used directly to create social impact,” Flatau said.

“Whether that is investments in Aboriginal businesses… [in] social enterprises supporting employment options for disadvantaged job seekers or social impact bonds that create innovative options to address homelessness.”

Other members of IIWA include WA Super, the Western Australian Council for Social Service (WACOSS), Impact Collective, SEFA and Impact Investment Group.