Impact Report 2023 | Schroder BSC Social Impact Trust plc
Schroder BSC Social Impact Trust plc | Impact Report 2023
It is a privilege to share this second annual impact report with you and I feel humbled by the work showcased throughout. I invite you to dip or dive into the report, to explore how SBSI has catalysed, supported and measured impact this year. Through the purchase of a single, freely tradable share, SBSI offers exposure to hard-to-access high-impact assets and managers, with ongoing portfolio management, engagement and governance disciplines. Our intention is to create a successful example of how impact investing can both address social needs and create resilient financial returns, earning a place in many kinds of portfolios. SBSI’s investments support partnerships between UK fund managers, social organisations, and the communities they serve. In addition to delivering this high frontline impact and resilient financial returns, the SBSI team is committed to working with new investors developing their impact strategies. By attracting a wider base of shareholders, we aspire to grow the Company, to expand the pool of capital dedicated to social impact investment and to help democratise access to this market. Against a backdrop of a national cost of living crisis and global market volatility the Company’s investment strategy has created a portfolio with two crucial impact attributes. First, the ability to deliver vital services for people who need it the most. More than 90% of the people reached by frontline organisations are from disadvantaged, underserved or vulnerable backgrounds. Second, proven resilience to difficult economic conditions. SBSI’s portfolio delivers essential government-mandated services and derives a substantial proportion of revenues from government- The Schroders BSC Social Impact Trust plc (SBSI) exists to connect public market investors to a diversified, resilient portfolio of social impact investments addressing entrenched social issues in the UK. Chair’s Introduction
Contents
Chair’s Introduction
3
1 Introduction
4
backed sources, which have been historically stable through economic cycles. This is reflected in the Company’s Net Asset Value, which has grown 8.2% from inception in December 2020 to March 2023. SBSI’s strategy is to invest in and partner with organisations with strong track records of creating impact, and with fund managers that can demonstrate effective use of capital to support social organisations’ resilience and growth. SBSI is currently fully committed, and has worked closely with fund managers and external partners to ensure that we manage and report impact in line with industry best practice. We were pleased to work on a verification exercise for our first Impact Report, led by Bluemark. The review found that SBSI’s report reflected a robust approach to impact strategy and management, and identified areas for development that this year’s report addresses in detail across expanded assessment of sustainability, diversity and inclusion, and learning and engagement in SBSI’s key asset classes. We also welcomed the FCA’s Sustainable Disclosure Requirement consultation, which signals the regulator’s commitment to supporting the integrity and growth of the impact and wider sustainability investment markets in the UK. Transparent labelling and disclosure of impact products are essential for the impact investment market to grow healthily. The proposals offer a good foundation and we have been in dialogue with the FCA and other stakeholders to consider how these labels can be further developed. We were particularly encouraged by the Sustainable Impact label’s proposed focus on ensuring investments have a clear theory of change for achieving impact, and robust measurement and management processes to follow through. These elements have been fundamental to our investment strategy, which this report covers in detail. As ever, we see SBSI’s Impact Reports as part of a conversation with our shareholders and other partners that supports the Company’s success and also helps to grow the market for social investment. We’d welcome your feedback, and look forward to working with you in the coming year.
2 Impact Themes
12
2.1 Reducing Poverty and Inequality
12
2.2 Good Health and Well-being
14
2.3 Education, Training and Decent work
16
2.4 Just Transition to Net Zero
18
3 Asset Class Deep Dives
23
3.1 Debt and Equity for Social Enterprises
23
3.2 High Impact Housing
30
3.3 Social Outcomes Contracts
36
4 Impact Management
40
5 Environmental, Social and Governance Risk Management
47
6 Equality, Diversity and Inclusion
53
Appendix: Methodological notes
56
About the Schroder BSC Social Impact Trust plc
59
Susannah Nicklin Chair
3
2
Powered by FlippingBook