On the go: Social impact investment in the UK has grown from £830mn in 2011 to £7.9bn in 2021, an increase of nearly 10-fold, new research has revealed.
According to analysis from Big Society Capital, the market has seen a steady growth trajectory year on year, which continued even after the onset of Covid-19, with a 22 per cent increase between 2020 and 2021.
Further analysis of 5,900 social impact investment commitments made in the past decade showed that 82 per cent of these were made to charities and social enterprises based outside London, and 60 per cent to those in the UK’s most deprived communities.
Social and affordable housing funds, which aim to provide safe, affordable homes for tenants who might struggle to access mainstream housing, account for the largest segment of the total market at £3.8bn, Big Society Capital stated.
Social lending — which is generally used by social enterprises, trading charities and community-based enterprises that struggle to access mainstream finance — is the second-largest segment at £3.3bn.
Impact Investing Institute chief executive Sarah Gordon said: “There has never been a greater need for social investment in the face of the cost of living crisis and the climate emergency. It is therefore very encouraging to see the growth in the market that this report demonstrates.
“Now we need to see greater collaboration between government, institutional investors and social investors, so that different sources of capital can work together more effectively to reduce regional inequalities across the UK and deliver positive social and environmental impact, as well as a financial return.”
