Better Society Capital: A Leader in Social Impact Investing

Better Society Capital is a leader in social impact investing, with a focus on creating positive change through investments that benefit both people and the planet.

Their investment strategy is designed to achieve both financial returns and positive social and environmental outcomes, making them a unique player in the world of impact investing.

Better Society Capital has a diverse portfolio of investments across various sectors, including renewable energy, education, and healthcare.

Their goal is to create a better society by supporting businesses and projects that address some of the world's most pressing challenges.

Better Society Capital is a social impact investor that focuses on supporting organizations that work towards creating a better society.

It was founded in 2010 and is based in the UK, with a team that has a strong track record of investing in social enterprises.

Better Society Capital invests in a wide range of sectors, including education, healthcare, and the environment.

Their investment approach is focused on creating long-term value and impact, rather than just financial returns.

Their portfolio includes organizations that are working on initiatives such as improving educational outcomes and reducing health inequalities.

Better Society Capital has a strong commitment to transparency and accountability, and publishes regular reports on their investments and impact.

They also work closely with their portfolio organizations to provide support and guidance, and to help them achieve their goals.

Better Society Capital is an independent financial institution, authorized by the Financial Conduct Authority. This independence is ensured by a structure that involves The Oversight Trust.

One Government representative serves on The Oversight Trust board, which helps to maintain the institution's independence. The Oversight Trust is the majority shareholder in Better Society Capital, controlling 80% of the voting rights at shareholders' meetings.

For important issues, the consent of at least 75% of the Oversight Trust board is required. Big Society Capital reports regularly to The Oversight Trust on its financial performance, investments, and board and senior manager appointments.

The Better Society Capital CEO is invited to attend The Oversight Trust board meetings as an observer. This ensures that the CEO is informed and involved in the decision-making process.

Better Society Capital has received a significant amount of equity capital from dormant bank accounts and shareholder banks. £119.4 million was received in 2012, £106.0 million in 2013, and £24.6 million in 2014, bringing the total equity capital to £250.0 million.

The capital was received through two main sources: the Reclaim Fund Limited, which received £71.7 million from dormant bank accounts in 2012, and £63.7 million in 2013, and the shareholder banks, which contributed £47.7 million in 2012, £42.3 million in 2013, and £9.8 million in 2014.

Here's a breakdown of the equity capital received each year:

Better Society Capital has also made significant allocations to charities and social enterprises, with £893 million allocated in 2016 and £764 million drawn down in 2017.

Better Society Capital's mission is to grow the amount of money invested in tackling social issues and inequalities in the UK.

Their goal is to make a transformative impact on the social investment market by supporting intermediaries to be financially robust.

They aim to effectively channel capital to the social sector, which is crucial for creating meaningful change.

Better Society Capital also wants to increase awareness of and confidence in social investment by promoting best practice and sharing information.

This involves improving links between the social investment and mainstream financial markets, making it easier for investors to make informed decisions.

By working with other investors, they aim to embed social impact measurement and management into the investment decision-making and portfolio management processes.

Shareholder banks play a key role in Better Society Capital's operations.

Barclays, HSBC, Lloyds Banking Group, and RBS are the shareholder banks, each committing to subscribe to £50 million of Better Society Capital's shares.

Their individual shareholding will always be less than 10% of the outstanding paid-in capital, ensuring a balanced ownership structure.

The banks can vote at shareholders' meetings, with their votes proportionate to their shareholding, but capped at 5% of the overall voting rights to prevent any one bank from dominating the decision-making process.

Each shareholder bank has a bank-nominated director on the Better Society Capital board, providing a direct link between the banks and the organization.

In addition to updates from the BSC Director, the banks receive all board papers and quarterly and half-yearly reports, keeping them informed about the organization's progress.

The banks have the right to request a meeting with senior management to discuss Better Society Capital's performance, ensuring they have a voice in the organization's direction.

Better Society Capital's investment strategy is categorized into four main areas.

Specialised funds focus on specific social outcomes, such as health and social care, or investing in contracts won by social sector organisations.

General funds increase the supply of capital available to a wide range of frontline organisations.

Social Impact Bonds (SIBs) are used to raise finance for payment-by-results (PbR) contracts.

Big Society Capital can invest directly in entities responsible for funding and delivering outcomes detailed by PbR contracts.

Operating intermediaries provide support for the social sector, including performance measurement and capital raising.

Better Society Capital was established to receive significant funding from various sources. £400m was allocated for equity capital from dormant bank accounts, while £200m was provided by the shareholder banks, Barclays, HSBC, Lloyds Banking Group, and RBS.

Between 2012 and 2014, Better Society Capital received £250m in equity capital. This was comprised of £119.4m in 2012, £106m in 2013, and £24.6m in 2014.

The majority of the equity capital received in 2012 came from dormant bank accounts, with £71.7m being allocated through the Reclaim Fund Limited and £47.7m from the shareholder banks. In 2013, £63.7m was received from dormant bank accounts and £42.3m from the shareholder banks.

Better Society Capital has made significant allocations to charities and social enterprises. In 2016, a total of £893m was allocated by BSC and its co-investors, with £340m of that coming directly from BSC.

Here's a breakdown of the allocations made by BSC and its co-investors between 2016 and 2017:

BSC made 19 investments with a combined value of £94m in 2017, and for the first time, it recorded a net profit of £800,000.

Limited investment opportunities can hinder economic growth, but that's not the case with Better Society Capital. They provide access to a wide range of investment opportunities.

Their focus on impact investing allows individuals to contribute to causes they care about, making investing feel more personal. This approach can lead to increased investor engagement and loyalty.

By offering a variety of investment options, Better Society Capital can cater to different risk tolerances and investment goals.

Better Society Capital has changed its name to "better reflect its mission" to boost financial support for tackling social issues.

The organisation was created under the Labour administration of the early 2000s and launched under the coalition government in 2012 amid then Prime Minister David Cameron's Big Society agenda.

The new name "is a clearer articulation" of its mission to boost social investment "while retaining the track record" in this area.

Social investment body Big Society Capital has undergone a significant change by rebranding as Better Society Capital. This move aims to better reflect its mission to boost financial support for tackling social issues.

The organisation was created under the Labour administration of the early 2000s and launched in 2012 under the coalition government's Big Society agenda. Its new name is a clearer articulation of its mission to boost social investment.

Since its launch, the social investment market has grown more than tenfold from £800m to over £9bn. Better Society Capital has been working to bring investors alongside them to tackle social problems for over twelve years.

The organisation's chief executive, Stephen Muers, is excited about the opportunities this change will bring, stating that it provides a chance to reaffirm their mission and open up new opportunities to help maximise value for government, private investors, and social purpose organisations.

The new name is meant to unlock opportunities for Better Society Capital, and in turn, for the organisations they fund and the investors they partner with, while making the UK a better place to live.

Homelessness Initiatives are a top priority for BSC, with over 100,000 people in the UK living in temporary accommodation, a situation Muers describes as "horrendous".

BSC has been actively working on addressing homelessness through various initiatives. One notable example is their partnership with the Department of Levelling Up, Housing and Communities to support families in temporary accommodation.

The Energy Resilience Fund, launched in 2023, is another significant initiative aimed at reducing energy usage and stabilizing energy costs for community and social enterprises.

BSC's focus on addressing homelessness is a testament to their commitment to creating positive social impact.

The UK's current political landscape offers a big opportunity to bring social impact issues to the centre of the debate. This is according to Better Society Capital, which is working with 36 organisations to direct up to £50bn of additional private investment towards driving growth and eliminating poverty.

The UK has a chance to make a real difference in areas like homelessness, investments in poorer communities, mental health, and financial inclusion. Better Society Capital is trying to raise the profile of these issues, and they hope politicians will take them seriously.

Some people are listening, and progress has been made, but there's a lot more potential. Better Society Capital has good partnerships with the current government and is working closely with local and combined authorities.