Social impact investment is the use of public, philanthropic and private capital to support businesses that are designed to achieve positive, measurable social and/or environmental outcomes together with financial returns. Social impact investment can not only help to direct new capital flows to developing economies; it can also bring greater effectiveness, innovation, accountability and scale to investments, increasing their economic and social benefits for the world’s poor.
While these innovative new approaches will not replace the core role of the public sector or the need for philanthropy, they can provide models for leveraging existing capital using market-based approaches with potential to have greater impact.
The Social Impact Investment Taskforce was launched in 2013, with involvement across several OECD and non-OECD countries including in the G8 and G20. As a member of the Taskforce, the OECD produced a report “Social Impact Investment: Building the Evidence Base”, published in 2015. It highlights the importance of further international collaborations in developing global standards on definitions, data collection, impact measurement and evaluation of policies.
The next phase of work will expand to include a broader set of countries, including developing ones. While the social impact investment market is in the early stages of development, awareness has grown considerably. Countries such as India and Brazil have joined the Social Impact Investment Global Steering Group and activity in developing countries has increased, particularly as these countries are a key target for social impact investors.
The subsequent phase of OECD social impact investment work will continue to focus on building the evidence base. The findings from the four work streams will be pulled together into a second report to be released mid-2018.
The four social impact investment work streams include:
• Data – developing standards to collect internationally comparable data
• Case studies – looking at various instruments and their applicability in a variety of sectors and country settings.
• Knowledge sharing – through workshops focused on different players, regions and sectors.
• Policy – mapping policies in most active countries and determining those most effective and how they can apply to other markets.
Questions or comments? Send email to: DAC.Contact[at]oecd.org