Impact
There are profound questions about how distant government is, and can be, from local projects, initiatives and ideas that make real life changes.
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This article was first published in The Stornoway Gazette.
I come to you with news of impact investing. No, me neither, until a few weeks ago. I was at the University of Strathclyde’s Technology and Innovation Centre this week to host the Impact Investing Conference for The Times Scotland and the Scottish National Investment Bank (SNIB) - no, me neither, until a month or two ago. What I love about hosting such things is that I get to learn about something I’ve never heard of, or considered, ever before. Hopefully I can share some of the knowledge gained here because many projects throughout the Western Isles could gain from it.
The concept of impact investing is defined by the Global Impact Investing Network as: “Investment made with the intention to generate positive, measurable social and environment impact alongside a financial return.” This is a noble, laudable aim. The bank is given capital - by the Scottish Government - to award to projects throughout Scotland that will tick these boxes, and some additional, more detailed, criteria. But the idea is, quite simply, to do something positive and to make some money.
Around its second birthday, the SNIB faced the scrutiny of Ross Brown, professor in entrepreneurship and small business finance at the University of St Andrews School of Management, who called for a full review of the SNIB’s operations. In a paper released by the think tank Reform Scotland, he praises the concept of SNIB, but finds that its strategy, operation and impact have only had: "A very modest impact".
He said: "SNIB looks unfocused and ill-conceived, and this vagueness has created an unhelpful mission-creep. It is not an effective strategy for a publicly-owned bank, particularly given the very high levels of remuneration being awarded to the senior management team.”
His criticism is not without merit. I do think, however, that it is worth focusing on the praiseworthy aspects of the existence of the bank. Two years is a short time for anything to have any impact, in the grand scheme of things. I do recommend that we focus on the laudable, while always remembering that the money they are spending comes from the Government. Or, more accurately, since no government has any money of its own, the money they are spending is yours, the taxpayer’s.
So then, with appropriate caveats in place, the conference was about driving forward the idea of impact investing and gathering like-minded people. There were many of them there, around 150 enthusiasts. If there was anyone there from the Western Isles, I didn’t meet them.
It strikes me that renewable energy projects with the ambition to reinvest money into housing, ending fuel poverty, bringing children out of dire living conditions and driving communities forward generally, is an absolute open goal for which the SNIB can aim, with a financial return virtually guaranteed. You probably don’t need me to point out that this means the Western Isles, led by the Comhairle, should be elbowing its way to the top of the SNIB’s priority list. I don’t imagine our collective elbow would need to be particularly sharp - it should not be a hard case to make.
On a personal note, it was a real treat to host the conference alongside the excellent Sally Magnusson, whom you’ll know from various BBC programmes, and as a leading journalist, broadcaster and writer in Scotland. She interviewed Willie Watt, the SNIB’s chairman, and put the findings of Reform Scotland’s report to him. “Are they right?” she demanded. “No,” he asserted. He critiqued it for being the work of but one academic. But one academic is all it takes to make a compelling case. What I think is worthwhile, is to give SNIB a chance to prove itself. But it must be fast. The SNP government must ensure rigorous accountability on your behalf. It’s your money they’re stewarding - a fact of which they are well aware.
Traditionally, one of the issues with such ambitious institutions and initiatives, is that while those who need the money know best how to spend it, and are ready and waiting with a plan to execute, they can’t access the funds necessary to actually bring about change. (Imagine you’d asked seafarers, offshore engineers and service users in the Western Isles to design and run, say, a lifeline ferry service. I bet they’d manage it faster than you can say Ferguson Marine.)
There are profound questions about how distant government is, and can be, from local projects, initiatives and ideas that make real life changes. All of us know people who work in the community, and they effect more change in an hour than some governments can in whole parliamentary terms. Sometimes, that’s how it should be. Process is good, some level of regulation is helpful, plans and strategies ensure due diligence. But sometimes, distance is unhelpful. Let us not allow the Scottish Government-run Scottish National Investment Bank to become a Central Belt initiative. Don’t ever think it’s not for you, or for the person or people you know who have ideas for catalysing change in the community; who we know will have, or, indeed, are already having, a lasting impact. There’s a determination after this conference that money can - and will - be spent for the good of the people, on projects to benefit us all. That must take account of enthusiasm, energy and ideas in the Western Isles.