Scott Greenhalgh: Social Investment & Impact Investing

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In this episode we discuss social investment and impact investing with Scott Greenhalgh, Chair of Social and Sustainable Capital. Including:

• Is there a difference between social investment and impact investing? If so, what is it? Do we need to be clearer about this distinction?
• What is the relationship of ESG investing to impact investing and social investment?
• What is the current size and shape of the impact investment market in the UK (and globally)?
• How big a determining factor is govt policy in determining potential opportunities (especially around public service delivery)?
• How big a role could philanthropic foundations be playing by deploying their endowed assets for impact investing?
• Does impact investment/social investment necessarily involve sacrificing financial return for social return, or are there genuine “win-win” opportunities that deliver both?
• Even if there are such opportunities, is there a risk that emphasising or celebrating them will set unrealistic expectations about the market as a whole?
• Is it OK to use philanthropic capital or government funding as a way of subsidising returns for impact investors?
• Is this only acceptable as a temporary means to an end? I.e. as a way of making an investment appealing at the outset by de-risking it, but with a view to convincing impact investors sufficiently of its longer-term merits that they will invest alone?
• Is it difficult to ensure that the focus on social impact is maintained in the impact investing space? (i.e. is there a tendency over time to prioritise financial metrics and returns, which might lead people to invest in “safer” projects and organisations that carry less financial risk but also have lower social returns?)
• What ways are there of ensuring that impact investors and their investees maintain a focus on social returns as well as financial returns? 
• What is the principle of additionality and why is it important?
• Should we be concerned about the risk of companies engaging in “impact washing” or “purpose washing”- i.e. adopting the language and trappings of impact investing and social purpose in order to gain a reputational advantage or to offset criticism, but without actually producing any social value?
• What can we do to mitigate against this risk?

Related Links

• Social and Sustainable Capital
• Scott's blog series for Beacon Collaborative, "What is Impact Investing?", "The UK Social Investment Market", and "Impact Investing and the 3 Dimensions of Capital".
• "What Do Impact Investors Do Differently?" Harvard Business School paper
• Impact Investing Institute, "The UK impact investing market: Size, scope, and potential".
• WPM article, "Is 'Purpose' Always a Good Thing?"
• Philanthropisms podcast conversation with Farahnaz Karim
• Philanthropisms epsiode on "P