"Ultimately, this fund is about making a difference to people who are experiencing disadvantage or entrenched social issues as well as providing investors with a sustainable return," says Big Society Capital (BSC) investment director Joe Shamash.
As its inaugural Impact Report shows, the Schroder BSC Social Impact Trust is already making a difference to people in need. In deploying £67 million, it has financed more than 160 social organisations and reached 160,000 people, at least 90% of whom are from disadvantaged or vulnerable backgrounds.
From giving people who've experienced domestic abuse a safe place to live to bettering the lives of underprivileged schoolchildren and lifting low-income households out of fuel poverty, we relay some of the stories of social impact that have resulted from the Trust's first year of existence and how they score on the five dimensions of impact - what, who, how much, contribution and risk.
Hull Women's Network
Safe accommodation is a basic human need. Yet it is something lacked by thousands of women and children who live with domestic violence in the UK. It is a particularly pressing issue in Hull.
"When we came to Hull for the first time it became clear to us how dismal the statistics were surrounding domestic abuse," says Ben Rick, chief executive of Social and Sustainable Capital (SASC).
Police statistics suggest that at any one time there are 25,000 women and 19,000 children in Hull living in a violent relationship. Thanks to investment from SASC, Hull Women's Network can provide women and children with a way to escape the suffering, rebuild their lives and recover from the trauma of abuse.
A £3 million structured loan from SASC's Social and Sustainable Housing Fund, of which the Schroder BSC Social Impact Trust contributed £450,000, has allowed it to buy 49 high-quality safe houses.
It is hoped that the properties will enable victims to break free from abuse earlier and rebuild their lives. Statistics from UK-wide charity SafeLives shows that high-risk victims live with domestic abuse for an average of 2.6[1] years before getting help. Typically, 85% of victims seek professional assistance five times in the year before they get effective help to stop the abuse.
Impact Score Card
What: Transition to independent living, addressing several Sustainable Development Goals (SDGs), notably SDG1 (eliminate poverty) and SDG11 (sustainable cities and communities)
Who: Women and children living with domestic violence in Hull
How much: 49 safe, high-quality houses for more than 300 women and children
Contribution: Increased supply of social and sustainable housing to reduce 64% of women and children who are turned away from refuge in the UK[2]
Risk: Mitigate by expertise of award-winning Hull Women's Network, which is trusted by service users
West London Zone
West London is home to some of the most prestigious postcodes in the capital. But nestled among the multi-million-pound townhouses of Kensington and Chelsea are pockets of deep deprivation, which mean many children risk leaving school with little chance of achieving their potential. Covid-19 lockdowns only served to widen the attainment gap.
"The social issues we're trying to tackle are extensive and wide-ranging, around social, emotional and mental health, social isolation, poor outcomes in academic areas and attendance at school, and also parents at home not getting the help they need," says Joe Prendiville, director of business development at West London Zone (WLZ).
The Schroder BSC Social Impact Trust supports WLZ through the Bridges Social Outcomes Fund II, which manages an £18 million social outcomes contract. WLZ is helping to fund link workers, who form a trusted relationship with families, and co-ordinate a package of support for each child over a two-year period.
"Having a link worker made me feel safe within school and even outside school sometimes because she was always free to talk to," says Simone, a WLZ alumnus, who grew up in White City surrounded by gang violence. "I'm more focused in school. I take my education seriously. West London Zone has had a big impact on my life."
Impact Score Card
What: Improved life chances for children most at risk of poor educational outcomes, directly addressing SDG4 (quality education) and SDG10 (reduced inequalities)
Who: Disadvantaged children and young people living in West London
How much: 702 children supported in 2021
Contribution: Total benefits or savings per children estimated at £43,000[3]
Risk: Mitigated by quickly pivoting to adapt services during the Covid-19 pandemic
AgilityEco
Millions of people have fallen into fuel poverty and the Russia-Ukraine war promises to tip even more people over the edge.
A lack of investment and rising energy prices are pushing the government's statutory fuel poverty target - of ensuring as many fuel-poor households as reasonably practicable achieve a minimum energy efficiency rating of band C by 2030 - further out of reach.
Under the government's current rate of investment in energy efficiency, that will not be achieved until 2065 - 35 years late, according to AgilityEco[4]. It previously estimated that a further £18 billion of investment would be needed to meet the target.
With fuel bills set to soar again this October when the government's energy price cap rises, the funding gap will balloon further.
"It is imperative that further policy and funding is focused on improving the energy efficiency of fuel-poor homes to support the wellbeing of the most vulnerable people in our society," says Gearóid Lane, joint chief executive of AgilityEco.
"Investment in energy efficiency is the only truly sustainable solution to the energy bill crisis and to achieving low carbon homes."
The Schroder BSC Social Impact Trust supports AgilityEco, a leader in low carbon, energy efficiency and fuel poverty services, through its investment in the Bridges Evergreen Holdings.
Impact Score Card
What: Reduction in fuel poverty gap for vulnerable households, directly addressing SDG7 (affordable and clean energy) and SDG13 (climate action)
Who: Low income and vulnerable households across the UK at risk of fuel poverty
How much: 44,643[5] vulnerable households helped in 2020-21
Contribution: More than £200 million[6] of total lifetime energy bill savings for vulnerable households
Risk: Further assessment required on how much AgilityEco contributes to closing the fuel poverty gap
Download the Schroder BSC Social Impact Trust Impact Report
Read more about transformation in communities
Schroder BSC Social Impact Trust plc
This post is funded by Schroders
Key risks that are specific to the company
- There can be no guarantee that the Company will achieve its investment objective or that investors will get back the amount of their original investment.
- The Company has a limited operating history and investors have a limited basis on which to evaluate the Company's ability to achieve its investment objective.
- The Company has no employees and is reliant on the performance of third party service providers. Failure by the AIFM, the Portfolio Manager or any other third party service provider to perform in accordance with the terms of its appointment could have a material detrimental impact on the operation of the Company.
- The financial performance of the Company will depend upon the financial performance of the underlying portfolio. The Company's portfolio will include Social Impact Investments over which the Company and Portfolio Manager have no control. In particular, investments in Impact Funds and certain Co-Investments will be managed by third party managers. The Company's performance and returns to Shareholders will depend on the performance of those Social Impact Investments and their managers.
- The Company's objective is to deliver measurable positive social impact as well as long term capital growth and income and these dual aims will generally be given equal weighting. Social impact is the improvement of the life outcomes of beneficiaries in a specific target group or groups. There is no universally accepted definition of impact, an assessment of which requires value judgments to be made. The Company's impact focus may mean that the financial returns to Shareholders are lower than those which might be achieved by other investment products.
- The Company depends on the diligence, skill, judgement and business contacts of the Portfolio Manager's investment professionals and the information and deal flow they generate, especially given the specialist nature of social impact investing. The departure of some or all of the Portfolio Manager's investment professionals could prevent the Company from achieving its investment objective.
- The Company will make investments where the Company's commitment is called over time. Due to the nature of such investments, in the normal course of its activities the Company expects to have outstanding commitments in respect of Social Impact Investments that may be substantial relative to the Company's assets. The Company's ability to meet these commitments, when called, is dependent upon the Company having sufficient cash or liquid assets at the time, the receipt of cash distributions in respect of Investments (the timing and amount of which can be unpredictable) and the availability of the Company's borrowing facilities, if any.
- The Company's investments may be illiquid and a sale may require the consent of other interested parties. Such investments may therefore be difficult to realise and to value. Such realisations may involve significant time and cost and/or result in realisations at levels below the value of such investments estimated by the Company. Any change in the Company's tax status or in taxation legislation or practice generally could adversely affect the value of the investments held by the Company, or the Company's ability to provide returns to Shareholders, or alter the post-tax returns to Shareholders.
Important information
This information is a marketing communication.
This document does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder BSC Social Impact Trust plc (the "Company"). Nothing in this document should be construed as advice and is therefore not a recommendation to buy or sell shares. Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy.
The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions.
Past Performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise.
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Issued in June 2022 by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registration No 4191730 England. Authorised and regulated by the Financial Conduct Authority
[1] ‘Getting it right first time', SafeLives
[2] Women's Aid
[3] Independent analysis of outcomes achieved by the WLZ programme by ATQ Consultants
