Introduction by Sarah Forster and Mark Hepworth, The Good Economy.
What is Place-Based Impact Investing?
These are investments made with the intention to yield appropriate risk-adjusted financial returns as well as positive local impact, with a focus on addressing the needs of specific places to enhance local economic resilience, prosperity and sustainable development.
Why is this important?
We have probably all heard about the levelling up agenda and addressing social inequalities. The chart below demonstrates the size of the challenge from an international perspective. Despite the United Kingdom’s economic position as the fifth largest economy in the world by GDP, our poverty rate and regional disparity in wealth is significant putting us closer to Hungary and Turkey than the Nordics. The bottom line is we cannot continue with this level of inequality.
So, how can Place-Based Impact Investing be achieved?
PBII is a hybrid model of investing for local, social value creation where we recognise that communities have social capital and investors have financial capital. By bringing them together, we can have a significant impact. These impacts can be structured around pillars, which builds on research undertaken by The Good Economy, The Impact Investing Institute and Pensions for Purpose in the report: 'Scaling up institutional investment for place-based impact', published in May 2021. This paper demonstrates that there is a model through which this type of investing can be done and that there is a financial case.
Click here to see the 'Investors meet places in the real economy' slide.
The key hurdle is getting all stakeholders in the PBII ecosystem together, speaking in the same language and understanding their unique challenges and solutions.
This is exactly what this – the PBII Forum – has been set up to achieve and is why the following panel discussion of stakeholder representatives was so important at our launch event.
What did our panellists have to say about the challenges and opportunities in PBII?
Karen Shackleton, Founder of Pensions for Purpose, chaired a panel discussion with Charlotte O’Leary, CEO of Pensions for Purpose, Angela Barnicle of Leeds City Council, Pete Gladwell of L&G, Callum Stewart of Hymans Robertson and George Graham of South Yorkshire Pensions Authority. Please watch the video here.
Breakout discussion groups
Following the panel discussion, participants split into breakout groups to discuss the questions: What are the key challenges in committing to place-based impact investments? How can these be addressed and by which stakeholders?
These were the key outputs from 10 breakout discussion groups:
We will be using the outputs from this launch event to determine the best ways to bring our members together, recognising all of the stakeholders in the PBII ecosystem.
If you would be interested in joining or participating in the PBII Forum, please contact Charlotte O’Leary.