NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, July 17, 2013

The Impact Investing Policy Collaborative (IIPC) London Principles — a critical piece of market infrastructure — have just been launched at an international conference in the UK.

The Principles are a statement of intent and integrity. Impact investing has emerged as one the most important new instruments for creating social value at the disposal of governments, through and in partnership with private markets. The Principles will be utilized by public officials to make smart regulatory, procurement, tax and other policy interventions in response.

After two days of deliberation at the Skoll Centre for Social Entrepreneurship in Oxford, this is what 30 public officials and researchers from more than 15 countries have agreed are the essential elements of a strategy for government participation in impact investing:

1. Clarity of purpose — which speaks to the importance of vision, leadership and perspective on what impact investing can realistically accomplish.
2. Stakeholder engagement — designed to surface ideas, engender public support, and ensure policy is well targeted to expressed needs.
3. Market stewardship — recognizing that policies that increase the supply of impact investing capital must be balanced by those that strengthen social enterprises and other capital recipients, together with intermediary infrastructure.
4. Institutional capacity — providing for the appropriate expertise, resources, and durability within government to ensure successful policy implementation.
5. Universal transparency — locking in accountability and supporting a culture of continuous, open learning and improvement among all actors in impact investing.