What is, what could and what should be the "new normal" in the UK?
Any recent conversation regarding social finance is likely to include talk of very similar things: the impact of Covid upon social investment; the potential for governments to ‘walk the walk’ and scaffold social enterprises through investment, subsidies and tax relief; the growing ‘investment’ of non-financial support alongside financial and the rise in individuals wanting to ‘do good’.
The ‘new normal’ suggests that individuals are now more aware of social impact and more enthusiastic to support enterprises that have positive social and environmental outcomes. In the UK, the recent ‘partygate’ scandal has contributed to a disillusioned and exhausted public who have now become more vocal in asking ‘where does my money go’? Expressed expectations are replacing trust that funds are being used to help tackle social and environmental challenges. The reality, however, too often still sticks to the ‘old normal’; that of uncertainty about how funding in the UK is put to work and uncertainty in the minds of individuals.
What is, what could, and what should be the "new normal" in the UK?ver. At the same time it can be argued that a lack of clarity an,d education has left it relatively unfamiliar. A pre-covid survey of 1,800 individuals in the UK revealed that 56% of participants had at least a moderate interest in impact investing, but only 9% had already invested. This gap, though alarming, can be bridged and in fact presents many opportunities for individuals, government and investors to support social impact innovations in the UK and for the UK to take on global leadership.
We are progressively waking up in a globalised society that recognises all too clearly that ‘we are in this together’ for good and bad. Issues that seemed so far from us previously, now feel closer to home. Indeed, we know we need to do a better job of balancing self-interest and ‘doing good’. Challenges around inequality, the environment and social needs have become more personal and pressing, and individuals are driven to make a personal contribution in areas perhaps traditionally confined to the philanthropic domain.
For the UK to show global leadership in social impact investing there is a need to identify and develop a set of tools to support growth – to educate consumers, raise confidence in financial institutions and, in general, raise greater awareness. An education of society that makes it easier to invest and by supporting a more comprehensive approach to reporting, where companies increase their focus on creating demonstrable positive social impact alongside financial returns, is a nice start. We are at a critical point in the development of social impact investing, however, we have strong foundations in place, including increasing investor demand and a growing societal awareness that can be supported by embracing a new type of social impact leadership in the UK government.