Social Impact Investing

SOCIAL IMPACT INVESTMENT: BUILDING THE EVIDENCE BASE
is important to further understand the evolution and behaviour of the SII market to inform policymakers of
any regulatory adjustments that might be needed. On the other hand, data collection efforts should also
serve to inform investors about SII market potentiality.
6.75 Priority should be given to capturing objective data before stepping into areas where definitions
are not yet established and data is deemed subjective. This may apply to either demand, supply or
transaction data. However, given that transaction data usually entails some information on both demand
and supply, a thorough collection of this type of data can be a valuable starting point. In early stages of
market development surveys can be a valuable tool. However, these are resource intensive and entail
significant challenges in terms on ensuring representativeness. In the long run, data collection needs to be
based on standardised reporting because, as the market grows, surveys will become increasingly expensive.
6.7. Possible Future Approaches for Data Collection
6.76 Different players are engaged in collecting data on SII components from different angles, with
different approaches and using different definitions. The plethora of new initiatives and reports attempting
to size the SII market is a positive trend and suggests growing interest in understanding SII. However it
makes it harder to identify key sources of data and compare and consolidate estimates. In addition, effort
duplication and data overlapping is a serious risk. Collaboration between those players currently involved
in data collection efforts is key. Some steps in this direction are already being taken. For example, the
“Social Investment Research Council” was recently created in the UK to consolidate research efforts and
avoid duplication. 31 Also, efforts to increase data comparability across countries are being made through
initiatives such as the GIIN or the work of the SIITF.
6.77 To ensure comparability across data collection efforts taking place in different geographies,
metadata is crucial as it helps understanding what exactly is available and how detailed are currently
available data. This is particularly relevant when SII definitions are not yet established. Moreover,
transparency requirements can help moving towards common standards. Such transparency requirements
might be burdensome on the different players involved in the market, but they necessarily come with a
standardisation exercise, whose benefits can outweigh the costs. It is however important to note that
standards might limit the scope for innovation. The right balance should be found so that the
standardisation procedure does not gridlock the SII market and prevents it from further innovating and
growing.
6.78 A system based on automatic reporting would bring some advantages in terms of coverage and
quality of the data. Such data can then be complemented with further information collected via surveys for
specific purposes. Data reporting can be very costly for companies (especially for small social businesses),
investors, intermediaries, while a significant part of the data obtained might end up not being used. It is
important to note that the direct benefits SII players accrue from reporting are relatively small, so the
adequate incentive mechanism needs to be put in place.
6.79 Requiring certification is an approach that can work as an incentive for companies to make the
effort to report. By being certified (see Box 6.6 for the case of B-corp certification procedure), social
enterprises gain more visibility as was as it sends a positive signal to potential investors. The certification
procedure by B-corp is burdensome as it involves a survey, an interview, request for documentation and
random checks, but it guarantees high data quality standards.
31. The Social Investment Research Council is a joint venture between Big Society Capital, Big Lottery Fund,
City of London, Citi and the Cabinet Office.
© OECD 2015 101