NatWest Social & Community Capital Adopts Total Impact Investment Approach
(IN BRIEF) NatWest Social & Community Capital (S&CC), a charity funded by NatWest since 1999 to support social enterprises, is launching a new investment policy known as the ‘Total Impact Approach’. This strategy will guide all investments to generate both social and environmental benefits. S&CC, shifting from its previous focus on UK-centric social investments and cash holdings, has now engaged Tribe Impact Capital to manage its funds sustainably. This move will see not only the continued allocation of £6 million to social investments but also a broader investment of over £6 million in sustainable global markets aiming for a CPI+2% financial return. This strategic pivot reflects S&CC’s commitment to leverage its entire balance sheet for creating a positive impact, aligning with the growing trend towards impact investing in the UK and globally.
(PRESS RELEASE) LONDON, 9-May-2024 — /EuropaWire/ — Natwest Social & Community Capital (S&CC), a charity set up and funded in 1999 by NatWest, which provides investment to social enterprises and community businesses, is today launching its new investment policy. The move means all S&CC’s capital and funds will be sustainably invested in ways which create social and environmental impact. This is called a ‘Total Impact Approach’. In order to execute this strategy, S&CC has appointed Tribe Impact Capital as its investment advisers.
Previously S&CC’s funds were either used to generate returns to enable its catalytic social investing, or simply held in cash. The focus was on creating social impact through a smaller pool of UK-focused social investing only. The charity will continue to commit funds to catalytic social investing through a £6 million allocation which targets break-even across its portfolio. However, S&CC’s new approach will ensure that the charity’s residual funds – consisting of an additional greater than £6 million sum – will also create impact through sustainable global investments, while targeting a CPI+2% financial return objective.
Ben Smith, Chair of the Investment Committee and Vice Chair of the Board of Trustees who led S&CC’s move to a Total Impact Approach, said: “The last few years have proven how vital the work of charities and social enterprises is. At NatWest Social & Community Capital we want to ensure that all our Balance Sheet – not just a small proportion which is assigned to catalytic social investments – reflects the world we want to see. We are delighted to work with Tribe Impact Capital on this journey.”
Victoria Papworth, S&CC CEO, said: “We are keen to see the whole of our funds contributing to positive solutions for both the UK and the planet. Working with Tribe Impact Capital will help us to generate positive outcomes with those funds which would not otherwise be working for social businesses in the UK.”
Tribe Impact Capital said: “We are excited to be working with NatWest Social & Community Capital as they embark on this pioneering journey. We are confident that we can support the charity in creating demonstrable social and environmental impact through the way it invests its Balance Sheet, alongside a financial return consistent with its target. In this sense, we believe we can help build further evidence of the power of impact investing to generate both positive financial and impact returns.”
Total Impact as an investment strategy is more common in the US, where organisations such as the Heron Foundation pioneered the idea. Whilst slower to gain traction in the UK, an increasing number of organisations are pursuing this approach, demanding active social and environmental benefits from the stewardship of all their funds.
Research from the Impact Investing Institute shows that the largest 300 endowed charitable foundations have over £87bn in total assets. If 5% of this were in impact it would add £4.35bn to addressing environmental and social challenges[1]. S&CC hopes that by successfully adopting this approach more organisations will follow suit to help unlock and generate significant volumes of capital to target impact.
NatWest Social & Community Capital aims to provide access to appropriate financial and business support to viable social enterprises, charities and community businesses unable to access mainstream finance.
[1] Impact Investing Institute, 2024. Evolving your endowment: Driving change through impact investing
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First published in this link of EuropaWIRE.
