A global taskforce on social impact investment established under the UK’s G8 presidency has published recommendations aiming to unlock up to USD $1trn (£620m) of new investment to tackle social problems.

Among its eight high level recommendations, a report by the taskforce argues trustee fiduciary responsibilities should be clarified to allow them to consider social as well as financial returns on their investments.

Investors should consider impact as a third dimension in investment decisions alongside risk and return, the report said, and measurable impact objectives should be set and achievements tracked.

The Social Impact Investment Taskforce was announced by Prime Minister David Cameron at the G8 Social Impact Investment Forum last June. It aims to catalyse the development of the social impact investment market.

“I want to use our G8 presidency to push this agenda forward,” Cameron said. “We will work with other G8 nations to grow the social investment market and increase investment, allowing the best social innovations to spread and help tackle our shared social and economic challenges.”

Sir Ronald Cohen chairs the taskforce, which also includes Kieron Boyle from the Cabinet Office. The taskforce is comprised of 22 people, including one government official and one representative of the social or private sector from seven countries and the EU, as well as one observer from Australia.

“This is not about increasing or reducing public expenditure, but helping government to benefit from innovation and private sector capital in order to achieve more impact with the money it has," Sir Ronald Cohen said. "In driving the achievement of impact, social impact investment harnesses the forces of entrepreneurship and capital and the power of markets to do good. It brings the invisible heart of markets to guide their invisible hand.”

Chancellor of the Exchequer George Osborne said the “compelling and comprehensive” report demonstrates the UK's social investment leadership and articulates what still needs to be done to unleash new funds.

“This report sets out a clear plan of action for governments and markets and I look forward to implementing many of its proposals,” Osborne said.

Impact Investment: The Invisible Heart of Markets urges governments to consider streamlining pay-for-success arrangements like social impact bonds, and adjusting national frameworks to support impact investment.

An impact investment wholesaler model is also suggested for government consideration, which funded with unclaimed assets to drive development of the social investment sector.

The report recommends boosting social sector organisational capacity including through establishing capacity-building grants programmes, and governments helping businesses to lock-in mission through providing the appropriate legal forms or provisions for entrepreneurs and investors who wish to secure social mission into the future.

Governments could consider providing their development finance institutions with flexibility to increase impact investment efforts, the report said, including through exploring the creation of an impact finance facility to help attract early-stage capital, and a social outcomes fund to pay for successful development impact bonds.

Each of the National Advisory Boards also launches today its own report on what is required in its country if it is to bring impact investment to take off. Big Society Capital chief executive Nick O'Donohoe chairs the UK advisory board.

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