|Social impact investment is an innovative approach to further drive economic development and achieving social outcomes. Social impact investing provides finance to organizations addressing social and/or environmental needs with the explicit expectation of a measurable social, as well as financial, return.|
What is at stake?
Social impact investment responds to the need for a new sophisticated financing strategy in order to deliver on the Sustainable Development Goals (SDGs) and the Addis Ababa Agenda for development finance. The SDGs apply to developed and developing countries alike and require new approaches and financing to address economic, social and environmental challenges. A strong emphasis will be needed on using public resources more strategically to catalyse private resources targeted towards achieving the sustainable development goals. While these innovative new financing approaches will not replace the core role of the public sector or the need for philanthropy, they can provide models for leveraging existing capital using market-based approaches with potential to have greater impact.
The OECD’s work on social impact investment (SII) is complementary to the blended finance work. Originally launched during the G8 Social Impact Investment Summit in 2013, it has expanded to include a broader set of countries with a particular focus on developing countries, and will provide valuable insights on the global financing for development strategy going forward. The OECD Phase I report was published in 2015, focused on building the evidence base in the social impact investment market.
(1) a set of principles about transparency and data sharing,
(2) an initial data reporting framework,
(3) a database of databases of relevant existing,
(4) publically available data, coordination between major initiatives on impact management and measurement.
(1) development of a framework for internationally comparable SII data,
(2) creation of a set of case studies focused on investment patterns and financing instruments,
(3) research and regional workshops mapping the SII market in developed and developing countries and
(4) mapping and review of policies to facilitate social impact investment.
This publication, and particularly the global data reporting framework, will support global growth of the SII market by increasing transparency, thereby incentivising the mobilisation of private investment.