The UK’s social impact investment market grew to £10bn at the end of 2023, according to an annual assessment by Better Society Capital, a seven percent increase from 2022. Pensions Purpose's Founder, Karen Shackleton, commented on how she welcomed the news hopes this will lead to a wider range of appealing products for funds looking to incorporate social impact into their investment strategies. 

Karen said: "Our Impact Lens research shows trustee knowledge and understanding of social impact investing has been slower to take off, with fewer of them aware of suitable social impact products compared to environmental impact investing. However, this is changing, and the latest figures demonstrate just how significant that shift is.

“The seven percent year-on-year rise in the social impact investment market signals that investors are increasingly recognising the close connection between social impact, climate action, and other forms of positive impact investing.

“It also reflects growing confidence that social impact can deliver strong financial returns while benefiting the communities and individuals pension funds serve. This growth has also been fuelled by a number of larger managers launching purpose-built impact investing funds.

“For pension fund investments, we would expect this growth to lead to a broader range of products that cater to funds looking to incorporate social impact into their strategies.

“As a result, pension funds are likely to allocate more capital to impact-driven opportunities and take a greater role in addressing some of society's most pressing issues. In the short and medium term, Pensions for Purpose would like to see institutional investors integrating social considerations more systematically into their portfolios and investment processes - and we know from our membership that this work is underway."

Many experts believe pension funds are in a prime position to drive positive social change through their investments.  

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