Signals | September 27, 2022

U.K. impact investing nears £8 billion on strong growth

Dan Keeler
Guest Author

Dan Keeler

ImpactAlpha, September 27 – The pound is tanking and U.K. energy prices are skyrocketing, but here’s something to be chuffed about: Impact investments in the U.K. have grown nearly ten-fold over the past decade, from £830 million in 2011 to £7.9 billion in 2021, according to a tally by Big Society Capital being released today. The impact sector grew 22% from 2020 to 2021.

Social and affordable housing funds continue to account for the largest segment of the U.K.-based impact investments at £3.8 billion. Social lending is the second largest segment, attracting some £3.3 billion in 2021.

“As the economic crisis worsens, the need for social impact investment to support social enterprises, charities and community enterprises will be ever more critical,” said Big Society’s Stephen Muers.

Rising prices

The recent market turbulence and the sharp slide in the value of the pound are creating challenges and uncertainty for impact investors, admits Big Society’s Jeremy Rogers. The current crisis is shifting the balance between the needs of social purpose enterprises and the needs of investors,” he told ImpactAlpha, “and we don’t yet know how far that balance will shift and how long it will last.”

The impact fund manager points to AgilityEco, which helps low-income households manage their energy bills, and the financial wellbeing app Wagestream, as social enterprises that are helping communities navigate cost of living spikes.