Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
6.25 Associations and networks also track some data on investors. Examples of these include the
Japan Foundation Centre for foundations; ACRI for bank foundations in Italy or EVPA for venture
philanthropists across Europe. However, they typically only provide information on specific types of
investors and coverage is limited to membership and to certain categories of data that fall short of what is
needed for an effective mapping of SII.
6.26 Information about institutional investors sourced from the financial system (central banks and
financial market authorities) as well as international organisations (e.g. OECD, IMF) and associations can
also provide an indication of the size of assets that could potentially be deployed into SII, assuming a small
percentage of those investors might be interested in SII. That interest would be conditional on a number of
factors such as monetising social returns and the creation of adequate financial vehicles to attract
investments from these investor types. A report by the World Economic Forum notes that these
mainstream investors require at least a market risk adjusted financial return due to fiduciary responsibilities
(WEF, 2013). The Asset Allocation Working Group report (WGAA, 2014) analyses how the fiduciary duty
perception that SII cannot deliver required financial returns (amongst other challenges) has been limiting
the allocation of funds to SII financial instruments. It also discusses how this challenge can be tackled and
SII integrated into portfolio structures of mainstream investors in the future, increasing the opportunity for
portfolio diversification.
6.27 Figure 6.2 below overviews financial assets held by major types of institutional investors for G7
and Australia. In comparison to GDP, these institutional investors hold large sums of money, even though
investments may often take place overseas. In some cases representing more than 90% of GDP (e.g.
pension funds in UK and insurance companies in France), institutional investors can steer the SII market
even if committing extremely small shares of their total portfolios into SII.
Figure 6.2. Financial assets of institutional investors
As a percentage of GDP, 2011
Source: OECD (2013f).
© OECD 2015 87