This Social Investment Insights paper focuses on how social investment can be used to support the conservation of the environment.
ig Society Capital is an independent financial institution with a social mission, set up to help grow the social investment market. At Big Society Capital we can invest in organisations with an environmental mission in the same way we fund social purpose organisations, through the social finance intermediaries we support. For Big Society Capital to engage, investments need to create both a positive social and environmental outcome. Investments must also aim for a positive financial return.
Overall as an organisation, Big Society Capital prioritises investments that positively impact disadvantaged groups in the UK.
There are four main ways Big Society Capital is likely to support the environment.
The first two are underway and operating well:
• Through the secured and unsecured lenders we back as a wholesaler. These intermediaries, Charity Bank, FSE Group, Social Invesmtent Scotland and Social and Sustainable Capital, amongst others, provide investment funds for environmental organisations seeking to achieve social and environmental impacts.
• Through supporting community share issues that back community renewable energy and other local environmental projects. The Resonance Community Share Underwriting Fund which Big Society Capital invested in alongside charitable trusts and foundations is an example of the kind of support we can offer here.
The next two ways we are likely to support the environment are less well proven from the social investment perspective, but provide opportunities:
- Backing innovative approaches that link the natural environment directly to social issues. For example, the mental health benefits of engagement with the environment may be supported through social impact bonds where the benefits of better health may be used to support environmental enhancement.
- Supporting interventions at greater scale. The land purchase approaches pioneered by trusts and foundations in the UK and the USA may be further scaled-up. Larger scale woodland restoration, or complex ecosystem services projects may ultimately be investable. Home energy efficiency interventions have a track record and may draw social investment in time.
There is a long tradition of social investors supporting environmental projects and organisations, led by pioneers such as Triodos Bank and Ecology Buidling Society, Energy4All and many local communities. We hope that Big Society Capital can bring our weight as a wholesaler and market developer to support the next wave of social investors looking for sustainable solutions to social and environmental problems.