Proposals to make Big Society Capital Capital more transparent are welcome but do not go far enough, respondents to the social investment body's consultation have said.
Big Society Capital (BSC) launched a consultation into a new transparency policy back in June after admitting earlier in the year that it had not been open enough to scrutiny.
The consultation closed last Friday, and saw responses from a number of charity sector bodies and chief executives.
Those responses include asking BSC to be more transparent about how its money is spent.
In its policy report, An Open Conversation About Transparency, BSC proposed three streams of transparency for its functions as “investor”, “market champion” and “corporate entity”. BSC said that although some of its “proposals may have wider consequences that we have not yet fully understood”, testing the proposals was “the purpose of this open conversation”.
Responding to the consultation, sector think tank New Philanthropy Capital (NPC) said that it acknowledged that that “the consultation is a further step forward”, but that it “believes it can and must go further if it is to be successful in achieving its mission”.
NPC called for more transparency from BSC in its 2015 manifesto which it released in February.
NPC said: “In order to build the social investment market BSC needs to prove what is achievable, and create a new lexicon and measurement framework which will have the confidence of potential private sector entrants.”
It is calling on BSC to “publish its framework for measuring social returns”; “assess the impact of its funds and its own impacts as an organisation, including its investment process and financial and social return requirements”; and to “publish not just the names of their investees and the rationale for these investments, but the amount of investment, the type of investment, and expectations of either social or financial impact to be achieved.”
NPC is also calling on BSC to “raise the bar” on financial reporting and social impact reporting undertaken by the social investment finance intermediaries (SIFIs) it works with, and to be transparent in how it plans to build towards a “future in which investors have comparable data on both social impact and financial returns within sub-sectors like education or housing”.
Chris Wright, chief executive of Catch 22, said in a response to the consultation that there is still “a lot of work to be done to raise wider awareness and understanding of social investment”. He has called on BSC to prioritise the publishing of data on investment deals, as the existing BSC case studies “present an incomplete picture”.
He also added that the “prospect of publishing social impact data is not emphasised enough in the current proposals”.
Jeremy Nicholls, chief executive of Social Value UK (formally the SROI Network), said in his response that he would like more transparency around the Big Society Trust, which is there to ensure that BSC remains true to its mission. Nicholls said that it would be beneficial to see more information on its decision making, including the minutes of BST meetings.
He also called for more information on all the transaction costs relating to investments made by BSC.
Dan Gregory, a consultant who works in the field of social investment, called on BSC to start thinking of transparency by default – “so everything should be transparent and disclosed UNLESS there is evidence that it should be otherwise, or legal impediment.”
Other suggestions he submitted to the consultation included open publication of BSC’s investment policy, write-off policy and board and investment committee minutes.
BSC has now begun reviewing the feedback to the transparency proposals, and will be publishing its final proposals next month.
To see the feedback in full, click here.
