G8 report calls for easing of government regulations to boost ‘impact investing’

G8’s special task force stresses the need for investment by impact-driven commercial organisations to aid social development programmes in countries

 
By Jemima Rohekar
Last Updated: Monday 17 August 2015

image

Governments can greatly improve investment in social good by removing regulatory barriers and providing tax incentives to safeguard the positive intentions of impact organisations, according to the first report of the Social Impact Investment Taskforce released on Monday. 

The taskforce, established by UK Prime Minister David Cameron at the G8 Social Impact Investment Forum in June 2013, presented a set of key recommendations to policy makers for harnessing the potential of private capital and talent to help countries realise their social development goals. 

"This is not about increasing or reducing public expenditure, but helping government to benefit from innovation and private sector capital in order to achieve more impact with the money it has," Ronald Cohen, who chairs the taskforce, said in a statement. Cohen leads a group of government officials and experts from the fields of finance, business and philanthropy from across G8 countries. 

The report by the taskforce recommends that governments relax norms, create supporting regulations and reward innovations to protect the social mission of impact-driven organizations. It encourages the entry of potential impact investors like banks, insurance companies, investment funds and retail investors and advocates for the easing of rules that restrict social sector organisations from generating revenues.  

The report also suggests the linking of returns to performance, allowing organisations to earn on investments only according to the positive outcomes achieved by them. Reliable measurement of these outcomes and the corresponding financial returns will persuade organisations to integrate impact investing into their business models.

Investment by ‘profit-with-purpose’ businesses is expected to help countries meet new sustainable development goals post-2015, directing the flow of capital to climate change, water scarcity, food security, lack of affordable healthcare and other concerns. 

 


Impact investment: the invisible heart of markets

World investment report 2014: investing in the SDGs

Investing for sustainable development? A review of investment principles – trends and impacts

Subscribe to Weekly Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.