Impact Report 2023 | Schroder BSC Social Impact Trust plc
Schroder BSC Social Impact Trust plc | Impact Report 2023
Appendix
commitment) of the age of all frontline organisations financed through SBSI investments, taken from the date of organisation formal registration to the current reporting period. 5. UN Sustainable Development Goal (SDG) alignment The frontline organisations in the Company’s portfolio are generally aligned with multiple SDGs (on average, each frontline organisation is aligned with three SDGs). Alignment is assessed by fund managers and validated as part of SBSI’s annual review for this report. Social organisations frequently take a multi-tiered holistic approach to impact, recognising multiple dimensions of exclusion or need for disadvantaged and vulnerable groups. This combined approach is a major driver for positive impact performance and reduced financial and impact risk. Combining housing (SDG 11) services with education (SDG 4), care (SDG 3) and energy efficiency technology (SDGs 7 and 13) can drastically improve a tenant’s financial and personal well-being, reducing risks of defaults and enhancing prospects of sustained positive outcomes. SBSI therefore recognises where frontline organisations are aligned to multiple SDGs. See asset class sections 4-6 for further discussion on models, including sustainable supported housing, services for vulnerable young people combining education and care, and energy efficiency services tackling fuel poverty and supporting the transition to net zero emissions. SBSI’s approach to due diligence and monitoring also ensures that the risk of any of the portfolio companies having a negative impact on any of the SDGs is assessed and mitigated. 6. U N Sustainable Development Goal (SDG) contribution SDG sub-indicators and/or national action plans can provide a benchmark for where we currently are, and an indicator of the potential value of investments as a contribution towards meeting targets. This report provides assessment of the Company’s portfolio against SDGs where we have identified relevant SDG sub-indicators and recognised UK level targets. SDG targets and sub indicators are sourced primarily from the UK Office for National Statistics and the Open SDG Platform, https://sdgdata.gov.uk/, and from the UK Government Corporate Report on Implementing the SDGs. https://www.gov.uk/government/publications/ implementing-the-sustainable-development-goals/ implementing-the-sustainable-development-goals--2 7. S avings and short term value to government SBSI invests in initiatives seeking to provide benefits to society in innovative and cost-effective ways. This report includes quantification of value generated for 12% of the portfolio, where we have high-quality data on the global cost of provision,
comparable data on existing alternative provision models as counterfactuals, and high-quality data on medium to long term outcomes for beneficiaries and government. This is primarily applicable in investments that operate at comparatively large scale, in well-established and data rich sectors, and with business models that require quantification of value generated for payment. Social Outcomes Contracts: Short term value to government is calculated using one of three methodologies a. Delivering against a public ”rate card”. For projects delivering against a public ‘rate card’, the value to government is the price of outcomes that Government was prepared to pay according to the rate card. Where this is higher than the amount actually paid, this signifies that the project offered a discount to the rate card prices, or achieved more outcomes above the contract cap, or both. b. Short term savings: For local projects targeting short term savings for a local authority, the value to government is the gross value of these savings during the tracking period (from investment to the latest available report) c. Valued at cost: Where there is no public outcomes rate card or a definitive short-term saving created at the level of the commissioning authority, no additional value has been assigned to the outcomes over and above that which government has been willing to pay. For more information on SOCs, please see https:// www.bridgesfundmanagement.com/outcomes- contracts/ Debt and Equity for Social Enterprises, AgilityEco: Calculated based on average annual savings generated through reduction in energy bills as a result of energy efficiency improvements per household. For more information, please see AgilityEco’s annual impact report https://www. agilityeco.co.uk/news/agilityeco-launches-its-impact- report-20212022. In addition, the total figure for this asset class includes community benefit funds generated by renewable energy assets. Investments also include small scale social organisations that have limited capacity for measurement, and organisations such as social housing providers where a lack of consistent measurement standards makes comparison of costs and benefits challenging. SBSI is currently exploring methods for assessing savings generated through housing services and other enterprise models, however we do not currently have sufficiently reliable data to report on this. We intend to publish further discussion on this topic in future reports.
Methodological notes 1. Number of beneficiaries
2. Reporting on contribution to impact Investment and non-financial support provided through SBSI and underlying fund managers makes a significant contribution towards positive impact: however we recognise this as one set of inputs among many that are instrumental in portfolio organisations achieving positive outcomes for people. The contribution of an investment towards the outcomes achieved by investee organisations is highly variable and may depend on the size and purpose of the investment, the effect this has on a Fund, frontline organisation’s ability to raise capital from other sources, and the nature of non-financial support provided to fund managers and frontline organisations. Given the wide range of variables, this report focuses on providing a clear picture of the impact achieved by organisations with contribution from SBSI, and offers SBSI attributed figures as a proxy based indicative estimate to support investor requirements for aggregation and onward reporting. 3. D isadvantaged and Vulnerable Beneficiaries The number of people served who are from disadvantaged or vulnerable backgrounds is a key performance indicator for SBSI. We define this as people or groups who are at risk of harm or disadvantage, including: – People living in poverty and/or financial exclusion – People experiencing homelessness and people at risk of homelessness – People with long-term health and disability conditions – Vulnerable children and vulnerable young people – People with learning disabilities and other neurodivergences – People with mental health needs – Victims of domestic violence/abuse – Refugees, asylum seekers, undocumented and other migrants – Ex-offenders – Voluntary carers – Vulnerable parents (e.g. single parents)
SBSI reports on the total number of beneficiaries reached directly by frontline organisations within the portfolio, and also reports on the subset of the total that is attributable to SBSI’s investment. Total beneficiaries: This is an aggregation of the beneficiaries reached across the three asset classes that SBSI invests in: – Housing – total number of people provided with homes by housing initiatives financed by SBSI- supported Funds. – Debt and Equity for Social Enterprises – total number of people provided with services or products by organisations and projects financed by SBSI-supported Funds. – Social Outcomes Contracts - total number of people provided with services by partnerships financed by Bridges Social Outcomes Fund II. The total figure includes: – Where the finance is targeted at a specific project (e.g. full finance for a frontline organisation to use for a specific purpose such as development of a new housing asset) the total number of beneficiaries reached by the project. – Where the finance is targeted towards an organisation’s resilience and/or growth, the total number served by an organisation since investment. Approach for SBSI’s investment in the Triodos Bank Bond: The £5.7m Triodos Bank Bond contributes to Triodos Bank’s capitalisation, enabling the bank to leverage by eight times to provide at least £45.6m in loans, within a larger loanbook. Triodos Bank reports to SBSI on social impact for its entire loanbook, however SBSI’s calculation for total beneficiaries reached by the Bank Bond is based only on the share
of loans made possible by the Bond. SBSI attributed share of beneficiaries
This report includes the SBSI attributed share of total beneficiaries and other key impact metrics, based on the Company’s investment as a proportion of the frontline investee’s total capital.
– Older people with acute conditions 4. Partner track record/age
The track record of frontline organisations is a high- level indicator used to assess impact risk across the Company’s portfolio. The average track record for the portfolio is based on weighted average (by SBSI
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