Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
of companies rather than on the measured achievement of impact goals” as required by social impact
investors (see Chapter 4 for further details on definitions of SII).
2.16 Figure 2.2 below, developed by the Social Impact Investment Taskforce, shows the impact
continuum in which social impact investment lies in between “sustainability” (specifically referring to
CSR, ESG and SRI) and philanthropy but does not include either – only investments (e.g. not grants) that
proactively seek a measurable social impact alongside a financial return. However, many providers of
grants, such as foundations, are also social impact investors. Also, some businesses that have traditionally
practiced CSR, ESG or SRI have also moved into the social impact investment space. The role of
foundations and other investors is discussed further in Chapter 3.
Figure 2.2. The SIITF Impact Continuum
Source: SIITF (2014).
2.17 Social impact investors seek market-based solutions to the world's most pressing challenges,
including sustainable agriculture, affordable housing, affordable and accessible healthcare, clean
technology, and financial services for the poor (GIIN, 2014). Chapter 4 discusses the areas that fall within
the OECD SII definition.
2.18 Social impact investments can be made across geographies, sectors, and asset classes and can
have a wide range of return expectations. Often these investments are made with multiple types of
investors providing different forms of capital. By combining various forms of capital with different return
requirements, social challenges can be addressed in more scalable ways than possible by government alone
(Rangan et al, 2011).
16 © OECD 2015