WealthBriefing talks to a prominent figure in the UK philanthropy/impact investing world, involved with Big Issue Invest and The Big Issue Group. For much of his life, Nigel Kershaw has worked in the space, founding social enterprises and changing the way this sector is viewed.
As part of our continuing focus on impact investment and
philanthropy, this news service has interviewed Nigel Kershaw
OBE, FRSA, chair of The Big Issue
Group, and co-founder of Big Issue Invest and The Big
Exchange. The Big Issue publication is a familiar sight
on the UK’s streets. The organisation has changed the narrative
of people facing homelessness and poverty – showing that they can
take control of their lives. Since 1974 Kershaw has
created, built and scaled social enterprises and social
investment. He joined The Big Issue Group (TBIG) in 1994,
becoming its CEO and then group chair. Prior to joining
The Big Issue, Kershaw founded three printing
and publishing social enterprises and is a Social Enterprise UK
"Champion of Champions."
WealthBriefing: Most broadly, what is the
investment philosophy of Big Issue Invest: is it about doing good
in a way that yields a positive and competitive investment return
for clients? Are there other elements you would
Nigel Kershaw: BII was founded to create business solutions to tackle and prevent poverty for future generations. It is not about charity. The Big Issue itself is not a charity but a business, a social enterprise with a mission, assets, and dividend locks, which reinvests any profits back into the mission. The Big Issue magazine was co-founded by an international listed company, the Bodyshop, with the tag line “a hand up, not a handout,” and this is the philosophy which Big Issue Invest (BII) adopts. We invest in organisations, such as social enterprises, which aim to create sustainable solutions in an impactful way, and this includes a return for investors which has a clear, transparent impact.
What in your view are the key steps that individuals can
take for preventing poverty, with help from
BII manages or advises on over £450 million ($573.9 million) of impact funds through its investment funds and has directly invested in 550 organisations and social enterprises which are creating effective solutions for preventing and dismantling poverty. We also have an Impact Advisory Service that creates innovative impact methodologies, builds, and launches funds, carries out verification and confirmation, and writes and produces impact reports. We, of course, walk the talk and produce an impact report on ourselves to make sure that we are walking the impact talk. It is about creating effective business solutions and there is so much private capital out there that could be used to create even more impactful solutions.
You have partnered with large financial firms. What’s
your assessment of how well wealth management advisors and their
clients understand what you do?
We have been working with the likes of abrdn and Columbia Threadneedle over the last 10 years. The UK Social Bond Fund – originally launched with Columbia Threadneedle – is now a decade old and has been well supported by a small cohort of wealth managers and investment advisors.
We also co-founded the Big Exchange, an online investment platform, which includes 27 asset managers, 72 impact rated funds for their contribution to people and planet and £60 billion of assets under administration. We are additionally working on other fund launches such as a global gender bond fund and global equities healthy societies fund.
We chatted about how “greenwashing” and “socialwashing”
are all too often synonyms for fraud. Regulators are starting to
crack down on these areas, but what more should regulators and
the industry do to drive this behaviour out?
Not only fraud! We talk about money laundering but green and socialwashing does the reverse – it takes clean money and makes it dirty! We need the finance industry to make what it does understandable, accessible, affordable, transparent, and accountable to ordinary people who invest and save in it.
We launched our Impact Advisory Service at the end of 2023 and part of its offering will be to confirm and verify impact. All too often social and green impact claims are not grounded in the lived experiences of people and communities claimed to be impacted. So, let’s ask people and communities directly to verify what difference the impact investments and products have made to their lives.
What is the most common misconception about what you and
your colleagues do?
A lot of people assume that BIG is a charity. We are not and never have been. BII looks for business solutions to social problems and demonstrates that investors do not necessarily have to sacrifice returns to achieve impact. As individuals we can all do this by investing in impact solutions.
Since you launched Big Issue Invest, what
has been the most important development?
When we launched our first fund in 2010 it took conversations with 650 individuals and organisations to raise £10 million – nobody knew what we were talking about – and maybe still don’t! We achieved the first close of the most recent Fund IV, just before Christmas, in part, thanks to two companies – insurance companies Beazley and Aspen. We have brought the mainstream to impact investing – that’s the greatest achievement.