REPORT OF THE G8 TASK FORCE
The report," Impact Investing: The Invisible Heart of Markets" (available here), has three main categories of recommendation:
- Set measurable impact objectives and track their achievement
- Investors to consider three dimensions: risk, return and impact
- Clarify fiduciary responsibilities of trustees: to allow trustees to consider social as well as financial return on their investments
- Pay-for-success commissioning: governments should consider streamlining pay-for-success arrangements such as social impact bonds and adapting national ecosystems to support impact investment
- Consider setting up an impact investment wholesaler funded with unclaimed assets to drive development of the impact investment sector
- Boost social sector organisational capacity: governments and foundations to consider establishing capacity-building grants programmes
- Give Profit-with- Purpose businesses the ability to lock-in mission: governments to provide appropriate legal forms or provisions for entrepreneurs and investors who wish to secure social mission into the future
- Support impact investment’s role in international development: governments to consider providing their development finance institutions with flexibility to increase impact investment efforts. Explore creation of an Impact Finance Facility to help attract early-stage capital, and a DIB Social Outcomes Fund to pay for successful development impact bonds.
Subject area recommendations
Recommendations: The Age of Impact Entrepreneurship
- Provide capability-building grants for social sector organisations.
- Create legal forms or regulations that protect the social mission of impact-driven businesses.
- Relax regulations that prevent social sector organisations from generating revenues.
- Improve access of impact entrepreneurs to capital, including seed, early-stage and growth capital.
- Broaden use of outcomes-based government commissioning
Recommendations: The First Trillion
- Introduce regulatory and tax incentives for impact investment.
- Define fiduciary duty of foundation and pension fund trustees to allow investment in impact assets.
- Support specialist intermediaries that manage impact capital and develop impact investment products and services.
- Make impact products accessible to retail pension and savings investors.
- Establish a social impact investment wholesaler, potentially financed through unclaimed assets, to serve as market champion and help it create specialist investment intermediaries.
- Foundations and philanthropists to allocate a percentage of their endowments or wealth to achieving impact.
Recommendations: The Third Dimension
- Support a single impact accounting system that incorporates existing initiatives by GRI, SASB, GIIN, the EU and GIIRS.
- Publish data on the costs to government of social issues.
- Support standardised measurement of social impact to appear alongside financial performance metrics.
- Foundations to use grant capital to help impact-driven organisations build up the capacity to measure impact.
- Government adoption of impact measurement in reporting and contracting requirements.
Recommendations: International development
- Support coordination and collaboration between DFIs and their private sector agencies to advance impact investment.
- Explore impact funds to support small and medium-sized firms and those serving bottom of the pyramid customers.
- Allow development finance institutions to increase impact investment efforts.
- Explore creation of an Impact Finance Facility to provide early-stage risk capital.
- Encourage governments to explore how SIBs and DIBs might contribute to efficiency of social service delivery.
- Explore creation of a DIB Social Outcomes Fund to pay for successful DIBs.