Investing in places to make a real impact

Investing to make a positive difference is something that Big Society Capital has been doing successfully in the UK for almost 12 years. Its mission is to grow the amount of ​money invested in tackling social issues and inequalities in the UK.
Stephen Muers, chief executive officer of Big Society Capital. Image: Oliver DixonStephen Muers, chief executive officer of Big Society Capital. Image: Oliver Dixon
Stephen Muers, chief executive officer of Big Society Capital. Image: Oliver Dixon

Stephen Muers, chief executive officer of Big Society Capital, will be taking part in the Scottish National Investment Bank’s annual flagship conference, in association with The Scotsman and Insider Media, focusing on ‘Investing with Impact: Innovating Across Scotland’ in Edinburgh on 4 March. He will be joining a panel session to focus on: ‘Transforming communities so people can thrive.’

He says: “Investing for impact is our primary goal, with the aim of delivering significant change on meaningful social issues across the UK, including Scotland. We’re looking for investments which can make a decent financial return but also, crucially, have a measurable impact on something that really matters to people.”

Big Society Capital currently focuses on four broad areas. One is social property and housing. This, explains Stephen, is particularly for individuals who are often excluded from the housing market and therefore might otherwise be in temporary accommodation.

Secondly, it offers lending and debt finance to social enterprises, charities and other organisations that can have a high impact, but struggle to access funding from mainstream providers.

A third area is impact venture which involves applying the approach of technology venture capitalists to addressing social challenges like health care. And the fourth pillar is around where public sector bodies are prepared to pay if a positive social outcome is achieved.

Stephen gives the example of someone settling in accommodation rather than becoming homeless. He adds: “Another area we’re exploring more is the social and community impact of the transition to the net zero economy. We’re examining how we can support communities and

individuals on that journey. We’ve made quite a few investments in that space and I’m looking at how to expand this work.”

In terms of where place-based investment fits into the bigger picture, Big Society Capital has been working with various organisations, including local governments, to bring different social investment approaches together in one place. One example is a collaboration with Bristol City Council on the City Fund which has pooled resources to benefit a range of social enterprises and bodies tackling challenges in the area.

And in Scotland Big Society Capital has partnered with Social Investment Scotland to put money into social enterprises across the country to boost their impact.

Stephen believes the involvement of the public sector in projects has helped to deliver the most successful place-based outcomes. “Whether that’s local or national government or another public body, they are a really critical piece of the puzzle.”

The scale of projects and investments can throw up challenges, according to Stephen. Smaller organisations can often better understand what their local communities need, but large external investors, such as pension funds, like to become involved in projects on a bigger scale.

“There’s a trade-off and choice between going small and to the community, or getting bigger and generating more income. You have to come up with the right approach for the particular challenge..”

Focusing on Scotland, Big Society Capital has been involved with projects to tackle homelessness, drawing on its Sustainable Housing Fund and on a number of community renewable energy investments, including one in Wester Ross.

On place-based investment in general, Stephen says: “Scotland is pretty well-placed. This is partly because the Scottish Government sees the potential in social enterprise and the social economy potential. And the Scottish National Investment Bank is very serious about this

area and the opportunities that come from the likes of investment in renewables.”

Looking ahead to the ‘Investing with Impact: Innovating Across Scotland’ conference and the panel session, Stephen describes the Bank as a key partner of Big Society Scotland.

“We’ve made a lot of investments in Scotland that we’re proud of. I think there are more opportunities now than ever before,” he says. “There is a lot of evidence that social investment works, and creates a financial return. There are more investors who are serious about investing for impact. We can therefore take things to the next level. Everyone has to come together to create opportunities and, hopefully, the conference will generate some new ideas about how to make that real.”