The government will encourage investors to support social impact programmes by working with the investments and saving industry, it has announced.
It is committed to growing social impact investments to help address societal issues and see investors' money being put towards good causes they care about.
Alongside the announcement, the government published its response to the industry-led report, Growing a Culture of Social Impact Investment in the UK, which make a number of recommendations to better enable people to invest in line with their values.
The report called for a "culture of social impact investment" to "make it easier for people to invest" in such projects and "maintain momentum and build cohesion across initiatives".
As part of its response, the government said it is "committed to working with the investment and savings industry to support the launch of further social impact investment funds".
The government has also outlined plans to encourage more investments to flow into disadvantaged areas, coinciding with its plan for a "country that works for everyone." It wants to create investment opportunities that will help tackle social challenges in those communities while delivering a financial return for investors.
Minister for sport and civil society Tracy Crouch said: "People increasingly want to see their savings and investments to have a positive impact on society, as well as bring financial returns. By utilising the wealth of experience within the financial services industry, we can expand social impact investing to help build a society that works for everyone."
Allianz Global Investors vice-chairwoman Elizabeth Corley, who chaired the industry-led advisory group that produced the report, added: "Our financial institutions have long-recognised the importance of using their investments to generate a positive social impact as well as a financial return". She said as research shows more than half of people are interested in purchasing social impact investment products but that only 9% have done so, this is a market with "enormous potential, waiting to be unlocked by the type of focus and commitment announced today."
The advisory group's report highlighted a lack of "competence and confidence within the financial services industry" as a reason why such a low percentage of people have purchased social impact investment products. It comes after a survey by Allenbridge in 2017 found 82% of trustees and scheme managers felt they lacked hard data on social impact investment risk.
The economic secretary to the Treasury John Glenn said "it's vital for the industry and government to work together to make it easy for people to invest in the causes they care about" and claims the industry is "brimming with potential".
The government has said it will "continue to work alongside the regulators" and is expected to provide a progress update in winter 2018.
The Department for Work and Pensions is due to consult next week on clarifying rules around social impact and environmental, social and governance (ESG) investing to make it simpler for pension funds to invest in line with their members' beliefs.
Pensions and Lifetime Savings Association policy lead for investment and defined benefit Caroline Escott, said: "We are pleased to see the government committing to support this initiative, and championing businesses and industries that excel in social impact investing. Impact investing is the fastest-growing area of responsible investment. With their long-term investment goals and £2.2trn of assets under management, pension schemes are particularly well placed to have a positive impact on the economy and society through their investments.
"It's encouraging the government is focused on supporting trustees in considering the broader environmental and socialpacts of their investments."
Trustees lack expertise, time and resources to develop effective communications on technical pensions issues and need professional help, a major review of the British Steel saga has concluded.
In this week's Pensions Buzz, we want to know if you think trustees should consult directly with members before agreeing to a DB superfund buyout.
Thousands of savers taking tax-free lump sums ahead of retirement are at risk of a pensions shortfall in later life due to neglecting their remaining pot, Zurich has warned.
Professional Pensions is looking to update its list of pensions master trusts in the UK ahead of authorisation. Can you help?