The Australian Advisory Board on Impact Investing provides leadership to accelerate the growth of the impact investment market in and from Australia. It is one of 13 National Advisory Boards working to catalyse the global market for impact investing as members of the Global Social Impact Investment Steering Group. The purpose of these National Advisory Boards is to bring together leaders of organisations active in the impact investment field, foundations, social enterprises, investment organisations and others who share a vision for the potential of impact investment.
Delivering on Impact: the strategy to grow impact investing in and from Australia
The objective of the Australian Advisory Board is to build an understanding of the eco-system in Australia and the steps needed to remove obstacles and provide incentives for impact investment to develop. Its role is to push the national agenda forward.
In conjunction with delivery of the G8 Taskforce Report The Invisible Heart of Markets in September 2014, the Australian Advisory Board launched its strategy to develop the market for impact investing in and from Australia: Delivering on Impact: the Australian Advisory Board Breakthrough Strategy to Catalyse Impact Investment.
Delivering on Impact outlines a vision that is ambitious and achievable, underpinned by a program of activity to catalyse the impact investing market in and from Australia. The strategy is structured around 3 key pillars: leadership, action and policy. Since 2014, the focus of effort has been on action and delivery to execute on the strategy.
What’s interesting about Australia is you’ve got a set of cultural values and institutional forces that make the country very ripe for tackling social issues. So I think Australia should become one of the leading countries in the impact investment space.Sir Ronald Cohen, Chair, Social Impact Investment Taskforce, May 2014
Engagement and collaboration is core to this effort. Delivering on Impact was developed through extensive consultation with a wide range of practitioners in the field in Australia, as well as incorporating lessons from other countries and from the development of other markets. The implementation effort, led by Impact Investing Australia on behalf of the Australian Advisory Board, has been coordinated in collaboration with a diverse range of senior business and community leaders. Over 60 senior leaders have been involved in the delivery, working alongside members of the Australian Advisory Board and specialist advisers, many of whom have contributed their time and expertise pro bono.
The first pillar of the strategy is focused on leadership. The intention is to communicate the importance and potential of impact investment with one clear voice. This raises awareness and educates a broader range of participants, which builds understanding and confidence in the field.
Bringing focus to the big story of the global trends informing impact investment and its potential to enable more and different ways of tackling social issues provides a frame through which the great stories from the Australian market and contributions of practitioners can be better understood.
The ambition is for a dynamic market for investments that make a positive contribution to society, operating at a scale in which Australia is a valued and competitive participant globally.
Action and delivery are central to Delivering on Impact. The action agenda is designed to have a catalytic and amplifying effect in cutting through barriers to the growth of impact investing and moving the field forward. The actions are designed to stimulate different parts of the market simultaneously. They are the product of contributions, insights and engagement with Australian practitioners, stress tested against lessons from the emerging global market.
- Capital Growth: Growing available capital to encourage new solutions and build the resource base of organisations delivering impact
What’s been delivered:: A Blueprint for a flagship organisation, Impact Capital Australia (ICA) – a unique, independent financial institution designed to unlock the potential of impact investment in Australia and accelerate the pace and scale of development. ICA reflects a focused, targeted strategy to drive growth, diversity and innovation.
The Blueprint was developed through positive collaboration between local and global leaders in impact investing, strategy, social services, community, philanthropy and investment. It is grounded in a deep understanding of the local market and in the developments and learning that are occurring internationally. Work is well underway to translate the Blueprint to a market reality and the Australian Advisory Board has issued an open invitation to interested parties to work together to bring this unique institution to market
- Outcomes & Innovation: Encouraging quality enterprising ideas and enterprises capable of delivering transformative outcomes
What’s been delivered: In 2015, an Impact Investment Readiness Grants fund was launched in collaboration with, and seeded by, National Australia Bank (NAB). This fund was designed in consultation with The Difference Incubator, and provides grants of up to $100,000 for mission-driven organisations to enable them to access advice and raise capital to grow their organisations and impact. 16 grants have been made thus far in fields as diverse as education, ethical property, disability services, indigenous business, and community renewable energy projects. 6 organisations have already raised capital, on average achieving more than 23 x leverage on the grant funding.
Read about the Impact Investment Ready Growth Grants
A Practical Guide to Social Costs: Developing the evidence base for informed social impact investment was launched in February 2016. The Guide was developed by Deloitte Access Economics in collaboration with a working group of leaders and the Australian Advisory Board.
Government and community service organisations increasingly need to be able to demonstrate what outcomes are being achieved and what it costs to deliver them. Entrepreneurs who want to tackle social issues need information about the cost of social issues. The Guide is intended to help organisations spell out the costs of treating the symptoms rather than the cause of social issues.
- Market Building: Developing the market by generating benchmarks and data that enable a boarder range of investors to participate and contribute to efficiencies and scale.
What’s been delivered The inaugural Impact Investing Australia Investor Report was published in March 2016. The report, produced in collaboration with the University of Melbourne and the Responsible Investment Association Australasia (RIAA), provides new insights into investor awareness, interest and impact investing activity, as well as the future prospects and challenges facing the field. The survey, designed in collaboration by a working group of the Australian Advisory Board that included representatives from Standard & Poors, Mercer, Comparator, Russel Investments, First State Super, QBE, Regnan and UnitingCare Queensland, brings the first bottom up data to market. Over 123 organisations from individual investors to institutions contributed.
Another working group has completed the first benchmarking analysis of Australian impact investment market activity and performance. Benchmarking Impact: the Australian Impact Investment Activity and Performance Report 2016 captures the performance of retail and wholesale impact investment products and funds available in the Australian market.
To provide a reference point for the benchmarking exercise, one of the most comprehensive analyses of available impact performance data globally was conducted. This analysis identifies outcome areas in focus for investment, commonly used metrics and the extent to which they are being used and considered useful in Australia. This analysis is also published in the report as a contribution to the ongoing work of developing convergence and comparability for impact investment performance measurement and management
Read the Benchmarking Impact report here.
The Australian Advisory Board recognises that Governments have a critical and unique role to play in growing impact investing in and from Australia. Without their constructive engagement, progress in developing the impact investment market will be slower and less impactful.
Engagement and collaboration with Governments is a key area of focus of the Australian Advisory Board. In March 2016, we led a delegation of senior leaders to Canberra to encourage the Australian Government to take a more active role in enabling the impact investment market in and from Australia.
The policy focus includes building understanding of the role of Governments as as market facilitator and market participant, enabling greater private investment and removing existing barriers to entry.
Read the G8 Taskforce report on Policy Levers & Objectives and The Role of Governments and Policy in Social Finance by the Australian Advisory Board Chair.
Delivering on Impact – the Australian Advisory Board Breakthrough Strategy to Catalyse Impact Investment
Launched in September 2014, the Delivering on Impact report by the Australian Advisory Board on Impact Investing sets out an ambitious, dynamic strategy to accelerate the market for impact investing and deliver impact in Australia. Impact Investing Australia is driving the implementation of this strategy and its program of activity.