The G8 Leaders Embrace Impact Investing

Impact investing arrived on the world stage last week during the G8 Social Impact Investment Forum.  Heralded as a transformative tool with the potential to reshape global capital markets, both the UK and US governments pledged support.

Keynote speaker, Prime Minister David Cameron, affirmed his support by including impact investing as part of his agenda during his G8 presidency.  Speaking passionately about the power of impact investing to “tackle the most difficult social problems,” Cameron announced several supportive policy efforts including tax breaks for investments with social benefits and creating a new “social stock exchange.”

“The London Stock Exchange has made London the home for private finance; today London can cement its place as the home for social finance, too,” he told investors.

Also, during the forum, the US Small Business Administration announced it is nearly doubling the amount it will put into impact investment funds to $150 million. The money will be funneled through the Small Business Investment Company program, which targets early-stage enterprises.  The SBA unveiled its first socially minded SBICs last year and has licensed two impact funds so far: SJF Ventures and Michigan Growth Capital Partners.

Other endeavors were also announced during the forum including a task force to focus on the measurement of social returns and the asset allocation strategies that frame impact investing and a global learning exchange by the World Economic Forum and supported by the Impact Investing Policy Collaborative and the Global Impact Investing Network.

Representatives from more that 90 institutions including banks, foundations and multilateral funds attended the forum indicating that the case for impact investing was clear.