A government review has told trustees they must engage better with their members to build a nationwide "culture of social impact investment".
Over time, this should also be made a "natural part of default funds", but this will depend on a growing availability of opportunities, which are currently "scarce".
The report - written by an advisory group working for the Department for Digital, Culture, Media and Sport and the Treasury - said while this is the case, products including social impact investing are "not at the forefront of the financial adviser or trustee thinking when investment allocation decisions are made".
This is especially true as such opportunities can be "difficult to identify and crystallise," with many early in the development phase "implying material credit and liquidity risk". Another challenge is explaining the benefits of such investments as separate from the financial returns, the report argued.
In particular, within the multi-trillion pound pensions industry, impact investing is just a "drop in the ocean" with investors finding it difficult to "put large amounts of capital to work".
And rising governance issues since the introduction of auto-enrolment means trustees do not have time to explore such investing, and it is therefore "low down on the list of decisions that trustees face", according to a roundtable with pension professionals the advisory group held.
A further survey, conducted by investment researchers Allenbridge this year, found 82% of trustees and scheme managers feel they lack hard data on social impact investment risk, while 70% of trustees rely significantly on consultants, who may not be well-informed on the topic.
Another 40% believe there is a requirement for daily pricing and liquidity within pension funds, yet this is not the case with no legal or regulatory barriers in place.
One of the report's recommendations is that better engagement, including members registering on pension platforms, "should lead to better alignment with members' non-financial values, with social impact investments as potential fund choices providing they have an appropriate risk/reward profile".
"As product track records mature, we also envisage growth in social impact investing as a natural part of default funds," it continued.
Minister for sport and civil society Tracey Crouch MP commented: "We want people to make investments that reflect their values and have a positive impact on the issues they care about. These recommendations are an important first step and I look forward to working closely with the industry to bringing social impact investment into the mainstream."
The report also called on regulators such as the Financial Conduct Authority and The Pensions Regulator to build capability and integrate social impact into the regulatory framework and wider financial services understanding.
Also, the industry should work with the Investment Association and CFA Society UK to develop best practice and common standards for such investing, potentially integrating the UN-backed sustainable development goals.
All of these bodies, plus the government, should publish educational material to investors, advisers and trustees, referencing each other's work for consistency.
The advisory group's vice-chair and Allianz Global Investors vice-chair, Elizabeth Corley, added the review's aim was to catalyse the market's development.
"The energy and ideas contributed by the members of the group demonstrate the degree of interest there is in moving social impact investing forward," she added.
"Interest among individuals in seeing their savings and investments doing social and environmental good continues to grow, and we hope this report and its recommendations will contribute to the work being done to keep the UK at the forefront of the social impact investing market."
Josh Kendall, ESG Analyst at Insight Investment, said clients' interest in the topic was growing.
"Social impact investing is a growing theme for our clients that we capture within sustainable investment strategies," he said. "We have had the opportunity to deliver environmental impacts over the past few years with green bonds, though the number of social bonds is currently extremely limited.
"That is starting to change; last week saw the issuance of a gender impact bond to find gender inequality programmes, which shows that investors and financial intermediaries are responding and this can only be positive for clients interested in achieving financial and non-financial investments."
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