Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
Figure 4.1. List of characteristics
In dark blue boxes, grouped by SII component
Source: OECD.
4.9 Within each characteristic, suggested boundaries could help to address the variability in the
definition (which attributes are in and out). It is important to note that while some characteristics have
attributes that can be quantified (e.g. return expectation), others have attributes that are discrete in nature
distinguishing between different classes (e.g. different social target areas). Some fall in between the two,
with different classes that can be “rank ordered” (e.g. investor intent). When attributes are quantified or can
be ordered, thresholds are used to decide upon what is within the scope of SII. When no ordering is
possible, deciding upon what is SII or not requires selecting the eligible attributes (or “buckets”) that fit
within the criteria for SII.
4.10 Figure 4.2 below provides two examples of characteristics, their attributes and the eligibility
conditions. In the case of Social Target Areas, setting the eligibility boundaries means deciding which
“buckets” are in (e.g. Education, in light blue) and which are out (e.g. Culture, in light red). With regards
to return expectations, potential thresholds are also depicted in Figure 4.2 by black bars indicating that a
transaction is only considered SII if returns are expected to be at least return of capital (black bar on the
left), with an expected return that does not exceed the market rate of return (black bar on the right). Using
this approach, investments can be classified as SII by comparing them against each characteristic and the
related set of attributes and eligibility boundaries, based on a perspective of what should or should not be
considered SII for each of the dimensions.
44 © OECD 2015