In this Green Dream episode, Sasha Afanasieva, head of impact at Big Issue Invest, discusses the companies the firm invests in that are linking social and environmental outcomes, and ensuring inclusive practices.
NK: Hello and welcome to this Green Dream video interview. I’m Natalie Kenway for PA Future. Today I am joined by Sasha Afanasieva, head of impact for Big Issue Invest. Thank you very much for finding the time to speak to us today, Sasha.
Video above, full transcript below:
SA: Hi, Natalie. No, pleasure’s all mine. Thank you.
NK: For those that don’t know, in our audience or listening today, could you give us a quick overview of what’s Big Issue Invest does and what is aiming to achieve?
SA: Yeah, absolutely. So Big Issue Invest is the investment arm for Big Issue Group. And I’m sure many of heard because Big Issue was the homeless magazine aiming to tackle homelessness that was founded about 30 years ago.
And as a social enterprise, Big Issue realized how difficult it was to raise funding that was aiming to drive impact that wasn’t grant funding, essentially. And so that challenge was the starting point for Big Issue Invest. What we’re aiming to do is to raise funding for businesses for social enterprises that isn’t philanthropy, it’s not grant funding. But this funding helps businesses grow, scale their impact and become much more resilient financially as well.
NK: What kind of investment criteria are you looking for when you’re looking at allocating some of the capital?
SA: Big Issue Invest continues with Big Issue Group’s mission of tackling poverty and social inequality. We’re really looking to invest into businesses that are also addressing these issues. So it could be businesses that are providing, for instance, affordable housing, it could be companies that are providing employment and training opportunities for people who are coming from disadvantaged backgrounds, for example. It could be in the areas of health and wellbeing, financial and digital inclusion and also the community and environment.
These are broad areas that we see as important in tackling poverty and social inequality. And in terms of the specific criteria, it really depends on the kind of funding that the business is looking for. We have some earlier stage programs where, we would be giving sort of a smaller loan, for example, and we’d be looking at businesses that have trading income in place, but that may be earliest stage. And then we through to up to £4m in secured debt where you would have a property or some kind of asset that we can securitise for this debt.
It’s a range of programs but really the underpinning all of it is businesses that are prioritising impact. And that’s the key criteria for us.
NK: It’s good to hear there’s some real, really important social issues that are being tackled. I think I read the Big Issue Group has invested £2.7m in 13 social purpose organisations over the past 12 months, which is great.
Could you perhaps give us a few examples, outline some of this or stand out success stories of really made a difference in society?
SA: One of the companies that we’ve just invested, in the last year is a company called Genius Within. Our investment is about £500,000, so it’s quite substantial.
This is an incredible company that neurodivergent-led and owned business. They have really talented people who come from the academia who are helping to ensure that individuals who are neurodivergent have inclusive work environments where they feel happy and productive. And the way they are doing is that they’re working with individuals to help them and coach them, help them understand what they’re good at and how they can develop themselves.
But also they provide consulting, and they work with businesses themselves to make sure that they are actually inclusive and the practices that they have are helping people from very diverse people, basically. They’ve worked with 24,000 people in the last 12 months. And the funding that we provided is going to be used for developing this special platform that helps people of understand their talent and work with that and improve their career progression through that.
Another example that I think is quite interesting is Wolverton Community Energy. And this business is all about using solar energy. So putting solar panels on buildings in the community and using the profit to reinvest into community. And I think this is a really interesting company because we’ve been we’ve had in the last two years has been the cost-of-living crisis, and it’s really shown how environmental aspects, like where we get our energy from is actually very much linked to social factors as well, whether people can afford the energy that they use. This company is on the cusp of both, and it really shows how actually addressing environmental challenges can have a really positive social impact as well in the community.
NK: Some very interesting projects there, thank you for sharing. And you’re right, they are all very much interlinked the environmental and social sides. Social impact came up in the recent budget, with a social impact vehicle to mobilize private finance announced by Rachel Reeves.
Are you privy to any more information around what that might look like? Will Big Issue invest be involved in any way?
SA: I’d say it’s probably quite early stages of development. I don’t think that we have kind of all the exact details.
But I guess there are two aspects to think about: One thing is like you mentioned bringing in private investment.
It’s for conversations like Big Issue Invest and Better Society Capital and many others in the space to work and to be able to work with more commercial investors to drive social change in the UK. I think also, as far as I know, the other aspect of it is the program will be used for funding outcomes program. These are investment programs where you’re investing into achieving certain social outcomes, and designing programs in that way.
Within that space we have an outcomes fund, a £10m fund that we set about 10 years ago. And the aim of this fund is to design programs with the commissioners and with public sector funding to make sure these have innovative solutions that address very difficult challenges.
For instance, supporting people, supporting young people in foster care, providing programs to integrate refugee communities. It’s very difficult challenges where innovation is driven by thinking about what you want the outcome to be and designing around that. So, yeah, very early days, but we are very much looking forward to working with all the partners within the sector as well like we have been for a lot of our programs.
NK: Okay. Definitely one to watch for 2025 then. And yes outcomes-focused investments is a really big topic for ranges of future. So very interesting to hear. With all of these kinds of investments, we have that debate around whether investing for social impacts means sacrificing some returns. Is that a myth or is it something that investors do need to be mindful of?
SA: I think there is a range. There’s definitely with some of the work that we do and some of the programs that we run, that are concessionary returns to market. And for that reason, the investors funding these programs are also prioritising impact. So for instance, for a lot of the lending programs we have they’ll be funded by someone like Access, who is not looking to sort of maximize financial return.
But I would also say that there are programs kind of on the other side of that. That are looking into generating market returns. For example, we’ve recently launched a fund called Fund Four, which is all about providing securitised debt to businesses within the housing, social and healthcare and also community infrastructure sectors. That has been structured in such a way that it is offering market risk return rates.
And we actually have attracted commercial funding into that from two insurance companies. So there is a range I would say.
Also, the interesting thing is that you can have one fund that has slightly different returns depending on who the investor is. For example, with Growth Impact fund, which is a fund that we have for early stage businesses, we actually have investors who are more on the impact side, and they’re providing funding for technical assistance that we offer as part of the program.
They’re looking into help us work with these businesses and reduce the risk of the investment itself. It’s really about sort of structuring the funds and the products that we have to make sure that we cater to the priorities of the investor. It’s not a clear cut answer, I would say there is a lot of flexibility and looking to map out things that work for as many different investors as possible.
NK: Yes, there’s definitely a lot more to think about than, sacrificing returns or not, isn’t there? Okay. Well, thank you very much for sharing your insights with us. We always end the Green Dream with this question. What is your favourite sustainable drink or snack?
SA: I would say my favourite is, it’s chocolate from Harry Specters.
And full disclosure, this is another one of our investments. But Harry Specters is really amazing. They, they essentially work with people who have autism to make sure that they’re included in society through employment, work experience and training opportunities. And it’s really excellent chocolate as well it’s really delicious. And for every £1 they can generate from selling the chocolate 69p goes towards supporting people with autism within their own business.
NK: A a sweet treat and a great cause, a great combination. Well thank you very much, it was great to hear from you today.
SA: Thank you, Natalie.
