How can we bring community engagement into impact investing?

Community Engagement Handbook in Place-Based Impact Investing
Impact Investing Institute
October 2022 to September 2023

Our partnership with the Impact Investing Institute brings together community engagement, place, and investing that has a positive social and/or environmental impact. In Autumn 2023 we launched our new guide, 'Fostering Impact: an investor guide for engaging communities in place-based impact investing', which aims to help institutional investors do high quality community engagement across the UK with a focus on underinvested areas. 

Why does it matter?

Business and markets affect our lives on all levels and are a fundamental part of society in the UK. Public engagement in decision-making goes beyond policy-makers and government. This project aims to support institutional investors to consider how community engagement can be built into their work on different levels to ensure the real needs of people are reflected in impact investing initiatives on a place-based level.

What is place-based impact investing?

Place-based impact investing seeks to have a positive social and/or environmental impact on a place-based level, focusing on addressing the needs of a specific locality. Place-based investing drives positive outcomes in underinvested areas of the UK. Impact investing works across a range of areas that affect everyday people’s lives such as housing, roads, clean energy generation, the high street and banking.

Why a place-based focus? Places matter – they are the places that we live, work, socialise, travel in and through, and contain our community and support networks. Places determine our health and educational outcomes, define access to opportunities, and define our life expectancy. So we must engage those with lived experience of areas to make them work best for everyone, especially those from less-heard people and communities. 

How did we do this?

We recognise that while there is willingness from many institutional investors to reach out to and engage communities in their work, they don’t always know where to start or how to do it. Institutional investors often work on a macro level, meaning they don’t work directly with place-based projects for which their investments aim to have a positive social and environmental influence.

So how do businesses that don’t work on the ground ensure the community voice that is essential to their work is embedded in their decision-making? This is where this piece of work comes in.

We worked with the Impact Investing Institute to create a handbook for institutional investors - the likes of HSBC, M&G and Schroders - that considers the complexities of community engagement when working at an institutional level. The handbook addresses what level of community engagement is appropriate for investors to take and offers a menu of options for investors, alongside a set of principles about what good community engagement looks like.

How were communities involved in this process?

It was important to us that we included the real voices of communities in the process of developing this handbook. In early 2023, we delivered a series of Community Cuppas in the North of Tyne region where we engaged members of local communities on key questions related to impact investing. We asked them who should be involved in such local decision-making and when community engagement should happen. Members of local communities in North Tyneside, Newcastle, and Northumberland were joined by representatives from the North of Tyne Combined Authority and local investors. The outcomes of these Community Cuppas have been fed into the toolkit. 



Our aim was to create a framework that is responsive to the needs of institutional investors, is non-prescriptive in nature, and offers a menu of different options to reflect the diversity of institutional investing structures. We wanted to create an accessible, concise and practical resource that provides a baseline for what good looks like that clearly demonstrates how community engagement is achievable – and to inspire investors to put it into practice.

Throughout the process we collaborated with investors to make sure the framework is fit for purpose and for the audience and a strong research dimension underpinned the process. As a result, we hope that the framework is utilised by institutional investors and used to embed community engagement into their portfolios of work. This has the potential to make a significant and tangible difference to on-the-ground communities in places across the UK that have, until now, faced the consequences of underinvestment, by centring local voices in impact investing initiatives.

The handbook was launched in autumn 2023, and is available here.

Find out more

If you would like to find out more about the project or would like a copy of the handbook when it is published, you can contact Carly Walker-Dawson (Head of Capacity Building) at [email protected].