DEEWR, in collaboration with JBWere, has developed a report that establishes a foundation for understanding impact investing in the Australian context: what it is, why it matters, what is happening here and what could or should happen.
The report showcases examples in Australia and internationally of people harnessing capital markets to: support community prosperity; encourage vibrant culture; and contribute new solutions for issues of exclusion and sustainability.
This report provides a foundation for understanding impact investing in the Australian context: what it is, why it matters, what is happening here and what could or should happen.
It has been informed by insights and experience from the field in Australia that acknowledge the challenges and opportunities ahead and enliven a vision for the future.
What if the growing interest, energy, and passion are not harnessed around clear and common purpose? What if there is not sufficient focus and leadership to create the structures to support a coherent body of practice, prioritise activity to demonstrate efficacy and build critical mass?
Realising the potential for impact investing is not a given. It is a strategic challenge requiring leadership, collective action and development of practice across sectoral boundaries. A concerted, energetic response to the call to action could deliver significant benefit for Australia and the region; a failure to answer could be a significant opportunity missed.
Pursuing innovations for social and economic benefit
The distinguishing feature of impact investing is the intention to achieve both a positive social, cultural and/or environmental benefit and some measure of financial return. Financial return distinguishes impact investing from grant funding; intentional design for positive benefit to society distinguishes it from traditional investments.
Impact investing has emerged against a backdrop of longer term global trends. Interest and activity are evident and growing across the world.
Fundamentally, this is about expanding the total pool of economic and social value, not redistributing what already exists. Impact investment is already having a positive effect globally in catalysing new markets and encouraging entrepreneurship and innovation for the benefit of society.
Impact Investing in Australia
Impact investing is happening in Australia today, although the term is not yet in mainstream use. Case studies showcasing what impact investing deals in Australia look like and who is participating are included in the report.
Even more significant than the innovation and impact evident in the early Australian transactions are indicators of activity from different actors in the market place and across a range of sectors which echo the international developments.
Australia has not yet seen a concerted focus on developing the field, yet foundations for increasing the scale and scope of impact investment are in place. International commentators visiting Australia have remarked on the signposts.
The potential extends beyond the domestic market, to what can be done from Australia, particularly in the Asian region.
The imperative now is to translate interest into action, and fragmented activity into a more coherent practice for impact investing in the Australian context.