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Social investment ‘trailblazers’ Triodos Bank offer blueprint for retail impact investing
Triodos Bank urges policy makers to help make social investment more accessible
29-10-2014 | Social investment pioneer Triodos Bank is urging governments and regulators to help transform the culture of impact investing by making the sector more accessible to ‘everyday’ investors.
In a new report, the Bank, which this week was named a ‘trailblazing social financier’ by the Social Investment Awards , highlights retail investors’ increasing desire for impact investing, and the significant role they could play in the development of the sector if it were more inclusive.
James Vaccaro, Head of Corporate Strategy at Triodos Bank and author of the report
‘Impact Investing for everyone: a blueprint for retail impact investing’ which is being presented at the TBLI Conference in Amsterdam today, builds on the idea that the entire concept of impact investing is designed to stimulate more direct connections between society and social entrepreneurs in the real economy. But argues that regulation – like the new crowd-funding rules – coupled with a lack of financial education amongst the wider public and continued focus on professional investors is preventing this sector from reaching its full potential.
Recent research shows a growing appetite for social investment; in a poll for Triodos Bank, 20 per cent of investors said they were likely or very likely to consider the social investment asset class or sector in the next 12 months. This rose to 51 per cent for the 18-35 age group, with 38 per cent saying they are very likely to consider social investment.
James Vaccaro, Head of Corporate Strategy at Triodos Bank and author of the report, said: "The desire for social investment is clearly there, and there are big opportunities to make progress at the moment – the EU is introducing ELTIFs (Long term investment funds) to support long-term infrastructure, much of which could be sustainability related impact investment. But we are at a cross-roads in terms of whether this becomes a mass movement for everyone or whether it is a new game that only a select few can get to play."
He continued: "Regulation tends to exclude smaller investors under the banner of protection and this can be a hurdle for people who wish to integrate their values into their investments – it’s a bit of a catch-22 which could end up excluding most people from something the majority of people are interested in."
Triodos Bank’s continuing efforts in the area of access to social investment was recognized by the Cabinet Office on Monday when the Bank was awarded the Investor Access Award at the Social Investment Awards.
Whitni Thomas, Investor Relations Manager at Triodos Bank said "We’re delighted to have won the Investor Access award at the Social Investment Awards; the award celebrates those who aim to create a market that caters to every potential investor.
"At Triodos Bank we believe it is pivotal to engage individual investors in the social investment market as the market will stagnate if is relies only on institutional investors.
"We have found time and time again that it is individuals who "get" the social impact of our clients most readily and that if we can develop social investment products that are suitable for them with tangible credible social impact, they will invest.
"We have worked hard to make social investment in the UK accessible to the broadest investor base possible, including crucially individual investors, and this award is great recognition of that."
Mr Vaccaro concludes: "With this report, we hope to stimulate a wider debate amongst policy makers.
"We are encouraging them to seriously consider how we can best overcome the current market barriers and help transform the entire culture of investing within society to create a fairer, values based and transparent financial sector."
The Triodos Bank report complements the report of the G8’s Social Impact Investment Taskforce ‘Impact Investment: the invisible heart of markets’, which is designed to catalyse a global market in impact investing.
Peter Blom, CEO of Triodos Bank, is the EU representative on the taskforce. Both reports are available at www.socialimpactinvestment.org .
Notes for editors
Social Impact Investment Taskforce
The Social Impact Investment Taskforce established by the G8 was announced by the British Prime Minister on 6 June 2013 at the G8 Social Impact Investment Forum in London. The aim of the Taskforce is to galvanise the development of an effective global social impact investment market, and to oversee delivery of initiatives announced at the G8 Forum. Each G8 country is represented on the Taskforce by a government official and a senior figure from the world of finance, business, or foundations. These representatives are supported by a national Advisory Board composed of country leaders from the field of social impact investment. The Taskforce is also being supported by four specialist Working Groups (WGs) focusing on priority subject areas: Asset Allocation, Impact Measurement, Mission Alignment and International Development.
About the research
4,013 people (aged 18+) were interviewed online on behalf of Triodos Bank by Opinium Research between 23 and 29 September 2014. Weighted to a nationally representative criteria. Of those. 1869 have some sort of investment product.
TBLI (Triple Bottom Line Investing) Conference is dedicated to building a global community of ESG & Impact Investors for over 16 years. Offering global learning and networking event series in financial hubs across Europe, Asia and the US. The mission of TBLI is to raise awareness and provide learning opportunities for Financial Professionals and Asset Owners on the benefits and opportunities of sustainable investing, and to maximize investment flows into sustainable projects and businesses. The conferences are their tool of choice to achieve this. Every TBLI CONFERENCE offers best practices, facts and figures, as well as latest developments on strategies, screening, auditing, reporting, analysis, indices and research.
Social Investment Awards
Triodos bank was awarded the Investor Access Award at the Social Investment Awards on Monday, 27 October.
The awards, backed by Prime Minister David Cameron and hosted by Money Saving Expert’s Martin Lewis, are run by the Cabinet Office and RBS and celebrate the impact of investors who support social enterprises and charities to grow and remain sustainable.
Investor Access Award: A thriving social investment market needs more individual and institutional lenders that are willing and able to invest in social ventures. This is why the UK government recently introduced the world’s first Social Investment Tax Relief. The Investor Access Awards celebrates those who are striving to create a market that caters to every potential investor - from the small scale retail investor looking to do more with their monthly savings, to the large financial institution seeking to make a multi-million pound investment.
Prime Minister David Cameron said: "Social investment can be one of the greatest forces for social change on the planet. Whether it is reducing re-offending, tackling youth unemployment or finding loving homes for the hardest to place children in care, by using the power of finance we can get to grips with some of the most difficult social problems that have frustrated governments around the world for generations. On behalf of the whole country I want to thank everyone attending tonight's event for what you are doing and for the social impact you are helping to deliver."
Sir Philip Hampton, Chairman of RBS said: "These awards recognise some of the true pioneers of social investment in the UK today. These organisations can play an important role supporting the UK economy, and local communities up and down the UK. We’re proud to have supported the development of social investment for the last 15 years, and these awards demonstrate our continued commitment to working closely with the sector."
Money Saving Expert’s Martin Lewis said: "There are many people who hope for more than just profit from their investments, they want to feel good about what they’re doing too. Social investments allow people to do that – to put money into projects that support social change. Therefore it’s important to support the promotion of those opportunities, so people realise it is a realistic option available to them. I would like to congratulate all of the winners and nominees."