27 June 2013
The Government must act to review City regulations to counter
widespread myths that are holding back the expansion of social
investment, according to a new report by the Charities Aid
Foundation (CAF) published today.
Britain could become the world leader in social finance if the
Government can allay the fear of regulation that risks strangling
the social investment market, according to the report by CAF and
Legal & General, a major provider of savings solutions and
investments to its clients.
Last month David Cameron hailed social investment as “a great
force for social change on the planet”.
Today’s report warns that uncertainty and lack of understanding
about risks and regulations covering social investments prevent
banks and other investors from developing schemes that effectively
finance charities and social enterprises.
The report also calls on banks, pension providers and other
major investors to build social investment into their mainstream
commercial operations. It urges Government and social investors to
improve awareness of social investment opportunities and share
expertise to help social enterprises make themselves attractive to
investors.
Researchers carried out in-depth interviews with social
investment experts, major banks, pension providers, business
schools and multinational corporations.
John Canady, Director of Philanthropy at the Charities Aid
Foundation, said: “Britain has the potential to become the world
leader in social investment. We need to make it clear that our
great financial institutions are open for social investment
business."
“But despite the rapid growth of social investment over the past
decade, the simple idea that investment can yield more than
monetary profits is either unknown or regarded as unacceptably
risky. There are too many perceived barriers to making the social
investment dream a reality. That needs to change, and change
now."
“There is a damaging perception that social investment is mired
in complexity and even runs contrary to regulatory controls. We
need ministers, regulators and leaders of the financial services
industry to dispel these myths and help Britain take the lead in
this exciting field.”
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