Two good thought pieces today all about SIBs. Rather than witter on myself, I will leave you to read them!

The role of social impact bonds

lgcplus.com

So what is the problem that SIB’s are trying to solve?

Given the ever increasing squeeze on resources, preventative services for children and young people are under pressure. Investing in new approaches can be viewed as risky with unproven benefits – particularly when it comes to measuring financial returns. In essence it can mean that vulnerable children are not always getting the help they need when they need it.

SIBs are an innovative way of attracting new investment to improve social outcomes. Through a SIB, private investment is used to pay for services, which are delivered by social sector providers with a proven track record. Financial returns to investors are based on improved social outcomes. If outcomes do not improve, then investors will receive no recompense.

Australia – Ethical investing with social benefits

The Sydney Morning Herald

Most of us are familiar with environmental investing – or even socially responsible investing – through which investors exercise their rights not to invest in companies they don’t believe in, such as the move by some health-related superannuation funds to pull out of tobacco-producing companies.

Through socially responsible investing, or SRI, investors can also choose not to invest in companies that have bad human-rights records. Also in this field is corporate activism, whereby investors – usually large institutions – invest in companies to change their practices by exercising their voting powers. Investor voting against remuneration reports at AGMs is one example of this.

To add to this list is the growing field of impact investing. This is investing in programs – usually partnerships between private and public interests – that try to achieve some kind of social change, in addition to investment returns.