We’re making progress with the new strategy which we set out last year, however, as we publish our 2021 Annual Review it is worth reflecting on what we achieved last year and sharing this with our stakeholders.
Like everyone else, 2021 was the year we started to learn to live with Covid-19, and I am very proud of the way Big Society Capital adapted to all the twists and turns of the ongoing pandemic ensuring that 2021 was as busy and productive as ever.
We signed a total of 12 new investments (including five follow-on investments), totalling £80 million in 2021. Since we were launched, we have now committed over £820 million, ultimately reaching more than 2,000 organisations addressing a wide range of social issues across the UK. This is nearly £200 million more than the original capital of £625 million from dormant accounts and four major UK high street banks, showing how we are now able to recycle that initial capital to reach more social enterprises and charities, building a sustainable market for the future and improving more lives throughout the UK.
2021 saw the launch of our revised strategy, setting out our plans and goals to 2025. We are now focused on the four investment areas –Impact venture, Social lending, Social property and Social outcomes contracts – where we feel there is greatest potential for us to make the biggest difference. We have ambitious plans to grow these areas over the coming years and, as a consequence, the whole social investment market. We believe the market could more than double from its 2020 levels to £10 billion-£15 billion by 2025.
Highlights
It’s difficult enough to squeeze a year’s activity into one publication and even more so to pick out just a few highlights for this blog. However, for me there were several standout moments from 2021.
Our collaboration with Government to channel an extra £30 million of funding into the Everyone In Social Investment Pilot was the first of its kind. The scheme is focusing on delivering housing and support to individuals who are rough sleeping, and families at risk of homelessness. The pandemic, and now cost of living crisis, means more and more people are closer to losing their homes so this kind of support is even more crucial.
Following on from the £75 million raised at its initial public offering in December 2020, the Schroder BSC Social Impact Trust raised an additional £10.8 million of capital from existing shareholders and new investors last year. This is a really important step in the growth of the Trust, which we believe opens the world of social impact investment to a much wider range of investors and has true potential to scale.
We also worked with partners across the sector on the campaign to extend Social Investment Tax Relief. Our collective efforts were recognised with a two-year extension to the scheme, which can be used by social enterprises and charities looking to raise patient and affordable capital. We will continue to work in partnership to ensure further commitment to policies that allow social enterprises, charities, and community businesses to access capital in the way they need it.
We published our equality, diversity, and inclusion (EDI) plan, which sets out our ambitions and plans to improve diversity in three ways: within Big Society Capital itself, in our investment process and in our wider market-building activities. I am pleased with progress we have made so far, for example by supporting Good Finance’s Addressing Imbalance programme which is looking at ways to help address the barriers facing leaders from under-represented groups or communities when trying to access finance. At the same time, I recognise there is still a way to go, and we remain committed to ensuring EDI is at the heart of our work.
Financial performance
In 2021 we reported a net profit of £16.1 million, representing a return of 2.6% on average capital deployed. Our net profit is largely due to some well-performing, and as yet unrealised investments in our impact venture portfolio, which have scaled considerably in the past year. These results put us on a clear track towards being the sustainable organisation we were set up to be and demonstrate that our investments can generate positive financial returns alongside social impact.
Changes in leadership
I would like to offer heartfelt thanks to Sir Harvey McGrath, who completes his term as our Chair and steps down this month. His leadership and contribution to our growth and progress over the last eight years has been significant, and on a personal level I am very grateful for his guidance in my time as CEO. He passes the baton to Robin Hindle Fisher, who has taken over as our new Chair. I, and the rest of the team at Big Society Capital, extend a warm welcome to Robin, and look forward to working with him to further our mission.
As always, thanks must also go to the entire team at Big Society Capital, who have worked so hard, and to the Board for their support and guidance over this busy year.
Ten years of Big Society Capital
This year marks our tenth anniversary, which provides a perfect opportunity to reflect on progress, the lessons we have learned, and the contribution we have made to the social impact investment market since our inception in 2012.
It’s important to recognise how far we have all come, however there are still serious social issues throughout the UK where investment can help, and we will continue to work with our partners to find solutions that channel capital to help the organisations who are trying to make a difference.
I hope that you enjoy reading our review of 2021. If you are not already part of the social impact investment movement, whether with your capital, ideas, or expertise, please get in touch with me or the team here at Big Society Capital to find out how you can join us to build this movement.