The development of social investment is hampered by a lack of an evidence base and a lack of agreement about what the term means, the author of an OECD report on the subject said yesterday.
Social impact investment: Building the evidence base, was published yesterday by the Organisation for Economic Cooperation and Development, and follows on from a report by a Social Impact Investment Taskforce set up as part of the UK’s chairmanship of the G8 group of wealthy nations.
The OECD report was launched at a roundtable event in Whitehall which was hosted by the Cabinet Office and chaired by Rob Wilson, minister for civil society.
Karen Wilson, the lead author of the report and a consultant in the Structural Policy Division of the Directorate for Science, Technology and Innovation at the OECD, told a roundtable of social investment experts that the report found there was “no comparable data” on social investment which allowed it to be measured across national boundaries, and that it was important to clarify a definition agreed by the G8 taskforce.
“When we’re talking about social investment we need to be comparing the same thing,” she told the meeting. “At the moment it’s not just apples and oranges, but grapes over here and pears over there.
“We really need to deepen the discussion about definitions.”
Wilson also told the meeting that social investment faced very different challenges in each jurisdiction.
“One thing which came out of the report were the big differences between countries,” she said. “Different countries have different tax laws, social problems and government institutions."
Wilson questioned whether there would be an international social investment market, featuring cross-border organisations, or a collection of separate markets in individual countries.
Sir Ronald Cohen (pictured), the first chair of social investment wholesaler Big Society Capital and chair of the G8 taskforce, said that despite the barriers that remain, social investment was becoming more internationally recognised.
“You no longer hear people say they don’t know what social investment is,” he said. “I think they would be ashamed to admit they don’t know.”
He said that Robert Shiller, the Nobel Prize-winning economist, had spoken at the World Economic Forum in Davos in support of social investment.
“He said he felt social impact bonds would transform markets,” Cohen said. “He said even his wife wanted to start one.”
