Industry-led taskforce to propose solutions to harness private capital at scale for public good

LONDON – As part of the UK’s G7 2021 presidency, the UK government today unveiled plans for an independent Impact Taskforce (ITF) to come up with solutions for a sustainable and inclusive recovery from the COVID-19 crisis and promote impact-driven economies and societies in the long term.

The new initiative, under the secretariat of the Global Steering Group for Impact Investment (GSG) working with its UK member, the Impact Investing Institute, will focus on fostering and facilitating discussions and recommendations around impact transparency, integrity, and trust. The Taskforce will also investigate ways to create financial vehicles that can deliver investments for the benefit of people and the planet worldwide. In doing so, it will actively look to advance impact investment in low- and middle-income countries hit hard by the pandemic.

The GSG and the Impact Investing Institute will head up two working groups to carry out the ITF’s core work.

• The GSG will oversee the development of thematic and technical efforts focusing on the need for greater simplification and harmonisation of impact reporting methodologies and accounting, as well as transparency and industry integrity.
• The Impact Investing Institute will lead on the design of principles and recommendations for financing vehicles that can mobilise private capital at scale to achieve impact in areas such as the creation of quality jobs, education and health in the context of the global transition to net-zero carbon economies.

Cliff Prior, Chief Executive of the Global Steering Group for Impact Investment (GSG), commented:

“We are delighted to have been asked by the UK government to lead the secretariat of the Impact Taskforce. Robust reporting standards and innovative investment structures are absolutely central to the development of the impact Investing market that benefits people and the planet. The creation of the Taskforce will put an impact ecosystem  firmly on the G7 agenda as countries around the world seek solutions for fair and just recoveries from the COVID-19 crisis.”

Sarah Gordon, CEO  of the Impact Investing Institute, said:

“Impact investment has the potential to contribute to solutions to some of the biggest challenges we face – whether that is a just recovery from the pandemic or addressing the climate crisis. To harness private capital at scale for public good, we need structures that meet investors’ requirements and deploy capital where it is needed, improving access to decent jobs, education and healthcare, and investing in a just transition to a net-zero world.”

The ITF will bring together relevant, diverse, and practical voices who are focused on maximising the impact of investments, drawing from the G7 countries and beyond. It will be chaired by The Right Honourable Nick Hurd, former UK Member of Parliament and Minister, who chairs the Access Foundation for Social Investment and led the UK Government’s work to scale the development of impact investment market between 2010-2015. The working group dedicated to harmonisation of impact reporting and transparency will be led by Douglas  L. Peterson, President and Chief Executive Officer, S&P Global, while the group working on the creation of impact financing vehicles will be headed by Dame Elizabeth Corley, former CEO of Allianz Global Investors and Chair of the Impact Investing Institute.  Sir Ronald Cohen, who led the Social Impact Investment Taskforce established under the UK’s presidency of the G8 in 2013, joins as senior advisor and taskforce member.

Commenting on the formation of the ITF, Nick Hurd, Chair of the Impact Taskforce, said:

“The state of our world requires a change in mindset from governments and the market. It will not be enough for private capital to do less harm. We need to mobilise trillions of dollars into investments that combine return with positive social or environmental impact. The Impact Task Force will show how that can be done.”

Douglas L. Peterson, President and Chief Executive Officer, S&P Global, said:

“Transparency and a common language for accounting and reporting are essential for every asset class and investment approach, and impact investing is no exception. The development of globally accepted impact standards will allow investors to see clearly how companies are performing both financially and on their returns to society, enabling them to better allocate their money to investments with positive impact.”

Dame Elizabeth Corley, Chair of the Impact Investing Institute, said:

“Impact investment is rapidly moving into the mainstream of global finance, as investors demand that their money does good at the same time as it generates a financial return. Traditional investment structures cannot adequately address the emerging challenges we face in ensuring that financing a transition to net zero is done in a fair and just way. We need additional innovative impact finance tools that will meet rising expectations and deliver investment that makes a measurable difference around the world.”

The ITF will also:

• Coordinate efforts with other relevant working groups in the G7, G20 and COP26, while working with initiatives led by regulators, such as the IFRS Foundation’s proposed Sustainability Standards Board (SSB).
• Produce technical documents and recommendations that will be shared under the UK´s G7 Presidency with Foreign Affairs and Development Ministers, Finance Ministers, standard setters, and the financial sector in December 2021.

The impact investing market has been growing rapidly, with impact assets under management reaching $700 billion in 2019. However, more capital needs to be mobilised to stimulate recovery from the COVID-19 crisis and drive fairer and more sustainable economies in the long term.

In developing countries alone, the pandemic is estimated to have magnified the existing $2.5 trillion annual funding shortfall to meet the Sustainable Development Goals (SDGs) by 2030 by a further $1.7 trillion in 2020. 

Given the central role that impact investing can play in achieving international objectives like the SDGs and the transition to a net-zero world, the ITF is expected to define a multi-year agenda.