Fostering Impact:

An investor guide for engaging
communities in place-based
impact investing

Supported by2 | Fostering Impact: An investor guide for engaging communities in place-based impact investingwww.impactinvest.org.uk | 3

Executive Summary“Fostering Impact: An investor guide forengaging communities in place-based
impact investing” was designed forinvestors, developers, and stakeholders
who want to enhance their impact
and financial performance by forging
partnerships with local communities
through meaningful engagement.

• Illustrative examples: Draw insights from real-life
cases of emerging practice, showcasing different
methods of integrating community engagement in theinvestment process.

Our guide empowers investors to identify and pursue
community engagement opportunities within a place-based
impact investment approach, and it lays out different ways
and methods of incorporating community engagement into
investment decision-making.

How to do community engagement well

Readers will find information, practical steps, and additional
resources on the following topics:

What is community engagement?
• Place-Based Impact Investing (PBII): Gain insights
into how investors can deepen their impact and meet
performance objectives by directing capital towards
underinvested areas for improved living standards andinclusive communities.
• Spectrum of public participation: Learn the levels of
engagement, ranging from information sharing, consulting,and involving, to collaboration and empowerment.

Why do community engagement?
• The significance of community engagement: Understandthe pivotal role of community engagement in shaping
investment decisions and outcomes.
• Motivations for meaningful engagement: Explore thekey drivers for investors to engage with communities in ameaningful and sustainable manner.

• Effective engagement strategies: Discover how toinitiate, plan, deliver, and sustain community engagement
efforts through diverse engagement methods that requiredifferent levels of resourcing.
• Leveraging partnerships: Understand how to engage
communities through intermediaries for mutually
beneficial outcomes.
• Avoiding common pitfalls: Learn about common pitfalls
and how to steer clear of them, such as seeking input
after decisions are made or lacking clarity on how to utilise
engagement outcomes.
By putting people and communities at the heart ofinvestment decisions, investors can play a critical andmuch needed role in creating thriving, inclusive, andsustainable communities.

4 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

About
About the projectThis guide is part of the Impact Investing
Institute’s programme of work on placebased impact investing (PBII), supportedby the UK Government’s Department
for Culture, Media and Sport (DCMS).
The programme supports financial
institutions to make more investmentswith the intention to yield positive local
impact as well as appropriate riskadjusted financial returns. This guideprovides a practical introduction tocommunity engagement for placebased impact investors.

The Impact Investing
Institute is an independent,
non-profit, set up toconnect capital to impact.

We also work with policymakers and civilsociety to advocate for impact investing
as a powerful tool to unlock solutions to
the world’s most urgent challenges likeclimate change and rising inequality.

The Impact Investing Institute andInvolve have worked together toproduce this guide.

Involve is the UK’s leading public
participation charity, which aims to build
a vibrant democracy where everyone
can shape a society that works for
us all. Involve develops, supports, andcampaigns for new ways to involve people
in decisions that affect their lives.

The Impact Investing Institute is anindependent, non-profit, set up toconnect capital to impact. We act as abridge between new economic ideas andmainstream capital markets to accelerate
the impact investing field. We support
investors to put impact at the heart oftheir commercial investment strategies.

The Impact Investing Institute and Involve
have brought together their respective
domains of expertise – impact investing
and community engagement – in orderto support both investors and thecommunities that their work affects
in building mutual understanding andconstructive ways of working.

About the partners

www.impactinvest.org.uk | 5

Foreword
The world is facing two great challenges – the transition toa low-carbon economy and rising social inequality.
Neither can be solved without addressing
the other. To create an economy inwhich people and the planet can thrive,
we need to transform the way capital isinvested. The Impact Investing Instituteis set up to reach that goal by acting as abridge between new economic ideas andmainstream capital markets.
Ask anyone, anywhere in the world today
about the net zero agenda and there
is a good chance they will say that it
might be helping the planet but not doing
much for them and their communities.
The places where we live, work, play,and spend time with family and friends
matter. Directing private impact capitalto underinvested places — commonlyreferred to as place-based impact
investing — has been shown to be aneffective way to raise living standards,
provide economic opportunity, and build
thriving, inclusive communities. But thefinancing challenge is significant andestimated to require more than £1 trillion
over the next 10 years.

Fortunately, we’re seeing an increased
appetite for place-based impact
investing among private investors.
Evidence shows that it can boost
overall investment outcomes andfinancial performance.
To be successful, those investments
need to consider the realities of aplace. And no one has a more rounded
perspective on these than the people
and communities rooted there. So how
can we make sure that investments
in local infrastructure, housing, andbusinesses take into account theirdiverse views and ideas? How caninvestors engage with communities ina way that benefits both investors andlocal residents?
For investors, it can feel daunting to getstarted. It is not easy to understandthe social implications of investment
decisions in places and how to engage
communities in a meaningful andsustainable way. But while it might feellike new territory, in many ways it’s not.
In traditional business, it’s standardpractice to listen to the voice ofcustomers. What these tools encourage
is for investors to be more thoughtful
and deliberate about all the otherstakeholders in a place.
Our step-by-step guide for successfulcommunity engagement will help
investors who either want to deepen
their place-based impact investing
approach or those who want to getstarted on their journey. This guide will
leave you confident in identifying placebased impact investing opportunities
and give you the tools that you needto develop and deliver a community
engagement approach. It will introduce
you to the spectrum of community
engagement, highlight good practice,and make it clear how to avoid
common pitfalls.
While this guide focuses on community
engagement as an integral part ofplace-based impact investing in
the UK, the general learnings andpractical guidance can be appliedelsewhere in the world. For example, in
emerging markets there is a growing– and legitimate – anxiety that entire
communities will be left behind in anarrow focus on transitioning to a netzero economy.
Going forward, our work will continue
to champion putting people andcommunities at the heart of investment
decisions. We will do so with the help of
our partners and wide investor network
who so generously helped to create
this guide.

Kieron Boyle
Chief Executive

www.impactinvest.org.uk | 7

Contents
Executive Summary3

About4
Foreword5

3.3 Delivering community engagement

30

3.4 Sustaining community engagement

38

3.5 Doing community engagement through others

40

3.6 Avoiding common pitfalls

42

1.

Introduction84.

Good practice: What can investors learn from others?44

1.1

What is the purpose of this guide?

8

4.1

How to consult

45

1.2

What does the guide cover?

8

4.2 How to involve

46

1.3

How was this guide developed?

9

4.3 How to collaborate

47

4.4 How to empower

48

2.	
Context: What should investors know
about community engagement?10
2.1

What is place-based impact investing?

11

2.2 What is community engagement?

12

2.3 Why should investors do community engagement?

14

3.	Approaches: How should investors
do community engagement?18
3.1

Getting started on community engagement

3.2 Planning community engagement

Appendix
I. Community engagement checklist

51

II. Getting support for community engagement

52

18
21

Endnotes54

8 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

1. Introduction
1.1 W hat is the purpose of this guide?

1.2 What does the guide cover?

Meaningful engagement with local
stakeholders and communities is a
key factor in the success of placebased impact investing (PBII). Investors,
developers, and other relevant
stakeholders can build trust, deepen
local impact and improve financial
performance by building partnerships
with communities.

The guide gives investors answers
on the main questions they might
ask themselves when consideringcommunity engagement:

Meaningful engagementwith local stakeholders
and communities is a
key factor in the successof place-based impact
investing (PBII). Investors,
developers, and otherrelevant stakeholders
can build trust, deepen
local impact and improvefinancial performanceby building partnerships
with communities.

Community engagement is increasingly
relied upon by PBII investors to deliver on
the promise of investing in and for places.
This guide aims to be a practical resourcethat will help investors to develop theirunderstanding and grow their practice of
doing good community engagement.
This is guide is for investors, including
asset owners that invest directly, andasset or fund managers who invest on
their behalf, who are making investment
decisions or leading the development of
PBII strategies.
The guide also offers insights for othertypes of investors, such as asset owners
or fund-of-fund investors, who areinterested in the benefits of community
engagement, but are engaging
communities through their underlying
investment managers.

• Context: Section 2 provides insight
into what is community engagement
and how it can be approached in a
PBII context. It also lays out the key
motivations for PBII investors to docommunity engagement.
• Approaches: Section 3 provides stepby-step guidance on how investors
can do community engagement andhow to avoid common pitfalls. Thissection focuses on engagement
done directly by the investor, butalso provides insights into doing
engagement through others (forexample an underlying fund manager
or the management of an investee
company or asset).
• Good practice: Section 4 summarises
good practice from which investors
can learn. The section lists examples
that illustrate good practice incommunity engagement as part ofinvestment decision-making.1• Practical examples: In addition to thecase studies in Section 4, practicalexamples of community engagement
are interspersed throughout the
document. While most of theseare done by investors, the guidealso provides examples by otheractors – such as local authorities orphilanthropic organisation - that giveinsights into effective community
engagement and could be replicatedin an investment context.

www.impactinvest.org.uk | 9

1.3 H
 ow was this guide developed?
The guide was developed throughextensive desk research and interviews
with practitioners of community
engagement and PBII.
As part of the development of the guide,
the Impact Investing Institute and Involve
also organised a series of “Community
Cuppas” - community engagement
events in February 2023 in the North ofTyne region. The “Cuppas” were attended
by members of local communities
in North Tyneside, Newcastle, andNorthumberland, representatives fromthe North of Tyne Combined Authority,and local investors. The learnings fromthe Cuppas were used to make surethe content of this guide takes accountof the preferences of a representative
community for PBII. Key findings from the
Cuppas are summarised in section 3.2.
The guide benefited from feedback fromkey stakeholders throughout August2023. Thanks are due to all those who
provided inputs and feedback and arelisted in the acknowledgements section.

10 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

2. Context:
What should investors know
about community engagement?
This section places
community engagementin the broader context
of place-based impact
investing. The section also
outlines the key motivations
explaining why investors,
and particularly place-based
impact investors, seek toengage with communities.

www.impactinvest.org.uk | 11

2.1 W
 hat is place-based impact investing?
Place-based impact investments(PBII) are made with the intention toyield positive local impacts as well as
appropriate risk-adjusted financial
returns, with a focus on addressing
the needs of specific places to enhance
local economic resilience, prosperity
and sustainable development. Typicalsectors in scope for PBII include
affordable and social housing, small andmedium-enterprise (SME) finance, clean
energy, infrastructure, regeneration andnatural capital.

Place-based impact
investments (PBII) aremade with the intention toyield positive local impact
as well as appropriate riskadjusted financial returns,
with a focus on addressing
the needs of specific places
to enhance local economic
resilience, prosperity, andsustainable development.

In the UK, PBII is a fast-growing field of
impact investment. In 2021, the Impact
Investing Institute, The Good Economy
and Pensions for Purpose publisheda joint White Paper on Scaling up
institutional investment for place-based
impact.2 The paper aimed to support a
nascent investment area and advocate
for the development of the right policy
environment and practice to support its
growth and subsequently, sustainable
development in the UK. Since then,momentum has increased. The UK
Government, in its Levelling Up White
Paper, called on the Local Government
Pension Scheme (LGPS) to invest 5% of
its assets in projects that support local
communities, noting it could unlock an
additional £16bn of investment into the
UK economy.3
A growing number of investment funds,
many drawing on LGPS capital, now
use a place-based lens. Examples of
institutional funds that seek to invest
using PBII include Legal & General, whocommitted to invest £4bn towards
levelling up the UK’s towns and cities,
and plans to invest £4bn into housing
and regeneration in the West Midlands
in partnership with the combined
authority.4 The Schroders Capital Real
Estate Impact Fund focuses on investingin areas where residents experience
above-average levels of deprivation andhave the highest needs for housing,income, employment and health.5 The
igloo Chrysalis Fund supports economic

growth and job creation by investing indevelopment projects across Liverpool
City Region, including improved
offices, industrial units, warehousing,and distribution.6

12 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

2.2 W hat is community engagement?
In line with the Good GovernanceInstitute, we define a community asa group of people with a tangible orsymbolic connecting structure – forexample, location, job role, identity, or
shared values.7 From a PBII perspective,
shared ties to a location, or place, isan obvious defining feature, although
this should not be seen to diminish
the importance of other key
community identities.

Community engagement is, in turn, a
process that allows local people andorganisations to play a role in shaping
projects and decisions. Community
engagement seeks to create a two-way
dialogue that benefits both community
members and the organisation(s) leading
the engagement. In the context of PBII,
we define community engagement as
the process of engaging local people
and communities in the development,
decision-making and/or implementationof an investment strategy or project.

Community engagement is usually split
into different types based on the level ofparticipation that is expected from thecommunity. The International Association
for Public Participation’s (IAP2) Spectrumof Public Participation is a recognised
global taxonomy for possible types ofengagement and is organised around five
public participation goals and associatedpromises to the public (see Figure 1).8
This guide follows this framework todemonstrate different approaches toCommunity engagement
is the process ofengaging local people
and communities inthe development,
decision-making and/or implementation of
an investment strategy
or project.

Figure 1: The IAP2 Spectrum of Public Participation. See Figure 5 for an adapted figure for the purposes of PBII.
Increasing impactof the Decision

InformConsult

Involve

Collaborate

Empower

Public participation
goal

To provide the public withbalanced and objective
information to assist them inunderstanding the problem,
alternatives, opportunities
and/ or solutions.

To obtain public feedback on
analysis, alternatives and/ or
decisions.

To work directly with the
public throughout theprocess to ensure that publicconcerns and aspirations
are consistently understoodand considered.

To partner with the public ineach aspect of the decision
including the developmentof alternatives and theidentification of thepreferred solution.

To place final decision making
in the hands of the public.

Promise to the public

We will keep you informed

We will keep you informed,
listen to and acknowledge
concerns and aspirations,and provide feedback on
how public input influenced
the decision.

We will work with you
to ensure that your concerns
and aspirations are directlyreflected in the alternatives
developed and provide
feedback on how public input
influenced the decision.

We will look to you foradvice and innovation in
formulating solutions andincorporate your advice andrecommendations into thedecisions to the maximum
extent possible.

We will implement what
you decide.

www.impactinvest.org.uk | 13

community engagement activities. As thisguide adopts a definition of community
engagement as a two-way process, itfocuses on practice linked to the ConsultInvolve-Collaborate-Empower public
participation goals, rather than thosecontributing to the Inform goal.9 Focus
on community engagement as a twoway process also means that the guide
does not explore at length traditional
approaches to community relations withincorporate social responsibility (CSR),
which might for example include staff
volunteering and donations to charitablecommunity funds, as well as instruments
and tools such as community shares,
which place the control of an asset
directly into the hands of the community.
While PBII investors might be mostfamiliar with community engagementthat seeks to deliver on the Inform andConsult goals, some of their peers are
deepening their community engagement
further along the participation spectrum.
Such approaches move beyond
community engagement to empoweringcommunities to have a stronger decisionmaking role in investment decisions anddeliver deeper local impact.

Participatory approaches in philanthropy and the public sector
Supporting the momentum towards
deeper community engagement
in PBII is the growing adoption ofparticipatory approaches in philanthropy
and the public sector. The risinguse of participatory approaches inthese adjacent fields has improved
understanding of how these models
can work in practice, and underwhat conditions they realise goodoutcomes. This expanding track record
is also demonstrating that bringing in
the perspective of people with lived
experience leads to better and more
informed decisions.10
In the field of philanthropy, there has
been a marked shift towards bottomup approaches that give the ultimate
beneficiaries more voice and agency
over the distribution of philanthropic
funds. In the UK, Camden Giving is aparticipatory grant maker with a mission
to end local poverty and inequality in its
local London area. The charity recruits
panels of around fifteen local people,

who are not already engaged in decisionmaking, to award funding on issues
relevant to their lived experience. Panelmembers are appointed for a limited
time, paid for their time and areprovided with training to support
their decision making.
While community engagement by the
public sector is commonly associatedwith traditional mechanisms for public
participation (such as consultations),
it has similarly witnessed the adoptionof practices including participatory
budgeting and participatory decision
making. To date, almost a million people
have participated in a local participatory
budgeting process, globally and theseprocesses taken together have allocated$350 million.11
In the UK, the North East Just Transition
Fund (JTF), a £500 million ten-year
commitment from the Scottish
Government to support projects which
contribute towards the region’s transition

to net zero, has given the community
direct decision-making powerover £4.2m.12
Working with the New Citizenship
Project, Kirklees Council in West
Yorkshire has used participatory
approaches with an explicit place-based
focus to generate tangible value.
Since 2018, the council has undertaken
27 “Place Standard” conversations
with almost 10,000 participants across
17 wards, involving at least two-thirdsof the borough’s councillors. Budgets
totalling £7.8m have been re-aligned
to facilitate and support place-based
working, and place-based engagement
has influenced £7m of capital
investment in small town centres. The
council’s civic crowdfunding programme,
Growing Great Places, has raised a totalof £364,600 from almost 2000 backers
for 37 successful local projects, with an
88% success rate. This represents a
2.5 times leverage rate on the council’s
own pledges.13

14 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

2.3 W hy should investors do community engagement?
PBII investors are finding that community
engagement can improve both sidesof the PBII equation, by driving better
outcomes for people and places while
improving financial performance.
On the one hand, community
engagement is central to the notionof PBII. If the ambition is to make acommunity’s experience better, thenthe investor needs to have a clear line ofsight to what the community thinks andfeels about an investment. This is alignedwith the preferences of communities,
who would prefer and increasingly
expect to be engaged in local decisions.14
On the other hand, investors who use
PBII seek a financial return, which canalso be enhanced through community
engagement, through improved
performance of assets and strategies
and better risk management.
Investors should reap benefits throughcommunity engagement across the
spectrum of public participation, howeverthese are likely to be heightened throughinterventions linked to the deeper
engagement part of the spectrum.

Required and voluntary community engagement
While this guide focuses oncommunity engagement thattypically goes beyond legal or
regulatory requirements, investors
and developers should be awarethat requirements to inform or consult
communities may exist at the national,
regional or local level.18 In the UK,
there are statutory requirements aspart of the master planning process,while in other geographies there
might be a requirement to engage withindigenous groups.

Specific benefits of community
engagement in a PBII context include:
Building trust
Building community trust is a key
imperative for PBII investors. Trustfacilitates the delivery of current andfuture local projects, and helps build a
track record to facilitate development
projects in other areas. At the same time,
PBII investors are likely to be more visible
to communities, as their investments
might affect their homes, their landscapeand their community. On the other hand,In some geographies, there mightalso be an expectation that investors
and developers enter voluntaryagreements with community groups,
such as so-called Community Benefits
Agreements in the United States.
Entering such agreements can bea strong signal of willingness to engage
meaningfully with a community andmight be a positive factor for
securing opportunities fromrelevant local authorities.

failing to build trust can have a significant
negative impact on the activities andoperations of PBII investors in local
communities, and hinder the achievementof expected outcomes.
Community engagement is increasingly
relied upon by PBII investors as aneffective way to build trust from
affected communities. Research foundthat investors who engage regularly
with communities, both formally andinformally, experienced fewer negative
perceptions about their activities.15

www.impactinvest.org.uk | 15

By giving communities a say – and insome cases a stake – in the decisions
that will affect them, investors can build
more positive relations and strengthen
local partnerships.

particularly useful means to ensure thatthe intended impact of investments has
been achieved and is used by investors
across asset classes.16

Deepening understanding of thelocal context

Community engagement can increase
the long-term financial return of relevant
investments. Research by the World Bank
suggests that the benefits of community
engagement ultimately outweigh its
costs, for example by preventing
negative long-term consequences.17
Adopting a place-based approachthat includes meaningful community
engagement can also contribute to asset
performance (see box).

Communities are likely to know their local
context best. Community engagement
can lead to a deeper insight into places,
which in turn will help to identify positive
impact, risks, and challenges at the local
scale, and ensure investor priorities alignwith community goals. Engagement with
communities can also help to identify
partners and synergies with otherinitiatives, and to create and sustain alocal ecosystem of positive impacts.
From an investor perspective, community
engagement can provide valuable inputs
into existing processes throughout
the investment cycle. Experienced
PBII investors often use community
engagement jointly with desk-based
research, including analysis of local
needs data to drive investment decisions.
Using both can help to verify, refine andif necessary, amend findings from eachmethod to produce more accurate andactionable insights.
Community engagement can also
augment processes used to assess,monitor and manage impact. On thelatter, community engagement can be a

Improving financial performance

Investors should reap
benefits throughcommunity engagement
across the spectrumof public participation,
however these are likely
to be heightened throughinterventions linked to thedeeper engagement part ofthe spectrum.

Legal & General Investment Management Real Assets:
Delivering value for communities and investors througha place-based approach and community engagement
Legal & General Investment
Management Real Assets (LGIMRA) own the Dolphin, a 680,000
square feet community and shopping
destination in Poole, a coastal town
in Southern England. The Dolphin
comprises 90 shops, flexible
working and community events
spaces, an NHS outpatient
assessment clinic, and a curated
high street for local independents.
Over the past three years, thescheme has been transformed
from a traditional shopping centre
environment into a multi-use
community centre, pivoting awayfrom a focus purely on shopping andtowards discovering, learning, working,and wellbeing.
LGIM RA’s first step in transforming theasset was to understand the needs ofthe local community via a combinationof data analysis and community
engagement. This formed the bedrockfor the creation of a Community
Partnership in September 2021, whichhas provided an ongoing framework
for engagement between LGIM RA,

the Dolphin and local stakeholders
including the council, charities,
educational institutions, housing
associations, and healthcare providers.
This community-driven impact
approach to investment has brought
holistic value by diversifying the useof asset and revenue streams, meeting
local needs, identifying business
opportunities, driving footfall and as
a result delivering sustainable investor
returns. Outcomes to date include:• 2023 footfall (January to end July)being 11% up on 2022 and ahead of2019 levels;• Consumer spend in Q1 2023 being
7.8% ahead of Q1 2022 (benchmark
schemes were -1.1%);• Visitor dwell time was 98 minutes
in Q1 2023, up from 90 minutes in
Q1 2022;• Spend per customer over thequarter increasing from £80 in
Q1 2022 to £83 in Q1 2023 (+3%).

16 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

Enhancing risk management
Community engagement is important forinvestor risk management, particularly
in sectors that are associated with longterm impacts, including infrastructure andreal estate. Failing to conduct appropriate
community engagement can be corrosiveto the project and its execution.19 In
particular, insufficient engagement canlead to conflict and backlash from thelocal community, delivery delays, harm
to organisational reputation or negative
direct costs (for example from litigation
or adaptation).

Evolving approaches to community relations
Figure 2 captures two approaches
to community relations based onwhether they incorporate community
engagement. The decide-announcedefend approach, which does notinclude community engagement, canseem quicker and simpler. However,this approach increases the likelihoodof generating conflict. Defending thesolutions against opponents delays
implementation, is time consuming
and requires resources. The engagedeliberate-decide approach, which
entails community engagement, allows
objections and doubts to be untangled
and worked through proactively.

Figure 2: The difference between approaches based on whether they incorporate
community engagement.22

Without engagement

DecideAnnounce

DefendWith engagement

EngageDeliberate

DecideOne often-cited example is the Fosen
Vind wind park in Norway. As local
indigenous Sami communities and otherkey stakeholders were insufficiently
engaged before construction, it later
became apparent that the wind park
disrupted traditional reindeer grazing
patterns. Legal proceedings ensued andculminated in the Norwegian Supreme
Court deeming the wind park illegal. The
wind farm continues to attract criticism,
including by prominent environmental
campaigners, and years of ongoingprotest, resulting in disruption ofbusiness activities.20

Can community engagement help overcome
NIMBYism?
Emerging evidence suggests thatmeaningful community engagement
can help to mitigate the risk of projects
being derailed by voices systematically
opposed to the development of new
infrastructure, commonly referred toas NIMBY (“Not in my back yard”).23
For example, the Sleaford Community
Power Fund was set up as apartnership between Schroders
Greencoat and the North KestevenDistrict Council to support community
projects and organisations withina five-mile radius of the Sleaford
Renewable Energy Plant (REP) in
Lincolnshire, England, which is owned
by Schroders Greencoat. Border toCoast, a local government pension
pool, is also invested in the plant as aminority shareholder.24

The management of the funditself represents a good example
of community engagement. North
Kesteven District Council administers
the Fund with the aim to distribute£125,000 over five years. A panel
made up of local community
representatives, local councillors
and representatives of Sleaford
REP meets quarterly to assess theapplications for community funding.
In addition to the Sleaford Community
Power Fund, Sleaford REP has funded
several community schemes, suchas apprenticeships. and provides freeheating to public buildings in Sleaford
town centre saving the council
approximately £100k per year.

www.impactinvest.org.uk | 17

Securing commercial opportunities
In an increasingly sophisticated andcompetitive PBII market, strong
credentials in community engagement
can provide an opportunity for
differentiation for asset managers
seeking to secure commercial
opportunities. Evidence of engagementwith communities is becoming
increasingly expected by asset owners
and other clients of PBII investors, who
are therefore encouraged to differentiatethemselves by developing or furthering
their community engagement approach.
In the UK, evidence of community
engagement can also help strengthensocial value scores, which will improvethe chances of procurement awards fromlocal authorities.21

The Just Transition Finance Challenge25
The Just Transition Finance Challenge convened by
the Impact Investing Institute brings together 22 financial
institutions – asset owners and asset managers, including
leading PBII investors – controlling over £4 trillion in
assets who are committed to invest for a fair and inclusivetransition to a low carbon economy. The Challenge’s
framework for just transition finance is articulatedaround three elements: i) climate and environmental
action; ii) socio-economic distribution and equity; and,notably, iii) community voice. The inclusion of the latterelement reflects growing interest in this theme bydifferent types of investors.

Figure 3: The three elements of the just transition.

Voice
unity
Comm

Socio-economic Distribution and Equity

Environmen
tal AcClimate andCommunity engagement isimportant for investor risk
management, particularly insectors that are associatedwith long-term impacts,
including infrastructure andreal estate.

tion

JUST TRANSITION

18 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

3. Approaches:
How should investors do
community engagement?
This section lays out the main considerations for investors
seeking to do community engagement, through a step-bystep guide to community engagement, insights into specificcommunity engagement methods and a list of common
pitfalls to avoid.

3.1 G
 etting started oncommunity engagement
Investors have different starting
points when it comes to community
engagement. Most investors do not yet
do extensive community engagement
and might not know where to begin.
Others might be already doing community
engagement but wish to enhance theirapproach, so it is as effective as possible.
This section aims to support investors
in doing community engagement.

It is structured as a series of questions,captured in Figure 4, that investors
can answer in turn to do community
engagement in a way that is adapted totheir circumstances and needs.
For ease of reference, Appendix I
captures the insights from this sectionin the form of a checklist.

www.impactinvest.org.uk | 19

Figure 4: Step-by-step guide to doing community engagement.

What does good community engagement look like?
What role should the investor play in community engagement?

Direct community engagement

Planning community
engagement

Community engagement
through others

What is the purpose of the engagement?
What is the public participation goal of the engagement?
What is the scale of the engagement?
What outcomes and outputs should theengagement produce?
What are the timescales for the engagement?
What information already exists?
What resources are available?

Through intermediaries(e.g., by engaging the fundmanager or managementof an investee or asset)

How will success be measured?
Who should be engaged?
Delivering community
engagement

Who can be a suitable partner?
Which method(s) should be used?
How should investors communicate with thecommunity engaged?

Sustaining community
engagement

How can investors embed community engagement in their activities?
How can investors communicate externally about their community engagement?

In going through these above steps,
investors will find it beneficial toreflect on who has a say in successive
decisions. Lived experience ofthe places and communities to beengaged can add real value, and someinvestors have accordingly developed
their community engagement
approach in partnership with thecommunities to be engaged.
At a minimum, investors should
ensure that diversity, equity andinclusion (DEI) considerations arereflected in the development andimplementation of their community
engagement, for example by ensuringthat a diverse set of stakeholders are
involved in the planning and deliveryof the engagement. On DEI aspects,
and in doing community engagement
approach more generally, investors
can seek specialised support from theorganisations listed in Appendix II.

20 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

The characteristics of meaningful engagement
While there is no “one-size-fits-all” approach that will
guarantee effective community engagement in all
situations, there are a number of characteristics thatare often cited in the literature and by practitioners as
conducive to meaningful community engagement:26• Appropriateness: Investors should ensure that
their community engagement approach isappropriate for their investment strategies. There
should be appropriate resourcing and guardrails
to mitigate circumstances, internal or external,that might be detrimental to community
engagement in the long-term.
• Continuity: To reap its full benefits, investors should
do community engagement as an ongoing process
throughout different stages of the investment cycle,
rather than as a one-off or series of engagement
events. Successful community engagement often
builds on continued interaction, particularly for
projects that have a longer time horizon.
• Additionality: Prior to conducting community
engagement, investors should familiarise
themselves with what is already known abouta place and the needs and preferences of local
communities. Where possible, investors should
avoid repeating engagement efforts with acommunity, unless there are compelling reasons
to do so. Investors should avoid doing community
engagement when there is no clear identified
purpose or outcome, to avoid contributing toconsultation fatigue.

• Collaboration: Investors should collaborate not
only with communities themselves but also with
relevant local actors, including local authorities andcommunity organisations. Where possible, investors
should collaborate with their peers who invested
in local places to avoid duplication and maximisecommunity outcomes.
• Inclusion: PBII should be inclusive when engaging
with communities, by taking steps to effectively
identify and involve a diversity of local people andperspectives. Investors should take particular care
to identify barriers to engagement and ensure thatthey have implemented mechanisms to remedy
them, increase accessibility and engage a diverse
and representative set of voices.
• Reciprocity: PBII investors should see community
engagement as a two-way process, which provides
the opportunity to build mutually beneficial
relationships. Investors should build and maintaineffective feedback loops with communities. Where
appropriate, PBII investors should also empower
communities over time, for example by helping tobuild local capacity and providing opportunities forcommunities to have a greater say on decisions thatwill affect them.
• Transparency: PBII investors should, to the extent
possible, be transparent about their activities thatmight impact a community, in particular aroundthe terms of their engagement, for example what
can and what cannot be changed as a resultof engagement.

• Accountability: PBII investors should put in placeappropriate accountability mechanisms to ensure
they deliver on their commitments. Investors should
also embed community engagement into theirprocesses, for example regarding environmental,social and governance (ESG) integration and impact
management, monitoring and reporting (IMMR).
Investors doing community engagement should
remain open to being challenged on any aspect of
their activities that affect the community.

www.impactinvest.org.uk | 21

3.2 P
 lanning community engagement
What roles can investors
play in community
engagement?

have expressed their preference forthe investor to lead the engagement,or do not have the resources to doso themselves.

The first step in doing community
engagement is to establish the role
the investor will play. Investors may
choose to take a direct or indirect rolein community engagement, ranging
from leading the engagement to
influencing and assuring engagement
through intermediaries, such as a fundmanager or the management companyof an investee or asset.

Community engagement through others

Direct community engagement
Investors may choose to engage
communities directly, alone or inpartnership with others. This is wellsuited to situations where community
engagement is expected to inform
an investment strategy or a specificinvestment for which the investor is
responsible or has significant control.
Typical examples include real estatedevelopment projects or private equity
investments that the investor owns orin which it has a majority position. Direct
engagement by the investor mightalso be appropriate when significant
stakeholders – such as the local authority
or community members themselves –Rather than delivering community
engagement directly, some investors
choose to take an influencing, or
stewardship, role in community
engagement. In such a role, even if
the direct relations with communities
have been “outsourced”, the investor
aims to ensure that the relevantintermediaries are doing appropriate
community engagement and, where

necessary, influence them towards better
community engagement practices.
This model will be the most familiar
to investors in different asset classes.
In the context of PBII, it is typicallyused when the investor has limited
control over an investment, for example
in a public equity investment or a private
equity minority position. It might also
apply best in the case of an asset ownerinvesting in a PBII fund, or in the caseof a fund manager engaging with its
investee companies or assets of which
it has outsourced management.

Choosing the right role
The best role for the investor to adopt will
depend on factors such as: the purposeand goal of the engagement, the typeof asset, its business model, the typeof investor (for example, asset owner orasset manager), whether the investor
is responsible for decision-making, theskills and capacity of the investor incommunity engagement and whose
engagement is sought.

When is community engagement by investors not appropriate?
While there are clear benefits
to investors doing community
engagement in many cases, investors
should remain aware that there are
instances where engagement with
communities, and particularly direct
engagement, might not be appropriate
and, in some cases, can lead to negative
effects that outweigh benefits.27
Investors seeking to do community
engagement are in particular invited

to conduct a preliminary analysis of
the power dynamics of a prospective
arrangement to ensure power
imbalances are not excessive.28

such as the use of a trauma-informed
approach and the curation of physically,
psychologically and socially safe
spaces for the engagement.

Caution should be exercised byinvestors developing strategies thatmight impact vulnerable groups (forexample social housing tenants, people
with disabilities or persons fleeing
abuse). Engaging with such groups
will likely require specialised skills,

In such cases, it is highly advisable
for investors to seek specialised support
from community organisations such as
those listed in Appendix II and reconsider
their engagement approach accordingly,
including by considering engagement
through experienced intermediaries.

22 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

Investors may choose to adopt a more orless direct role in community engagement
throughout their portfolios. For example,
they might deliver engagement directly
themselves to establish PBII strategies
and choose sectors for investments,
while they indirectly maintain thecommunity engagement integrity of
their underlying investments throughstewardship and assurance.

with an asset manager to develop abespoke PBII solution aiming to invest
in its local area can request community
engagement to be at the core of the
manager’s approach. Similarly, an asset
manager taking a majority or significant
stake in an investee company or asset
is likely to have the opportunity to
influence the investee’s approachto community engagement.

Indirect engagement does not meanthat the investor should remain passive.
The investor will often be able to steer
the relevant intermediary to enhance its
approach to community engagement.
For example, an asset owner partnering

Even in instances where generalcommunity engagement is outsourced tothe management company of the asset,
it may be appropriate for the investor
to organise occasional community
engagement events, so they hearcommunity views first hand as part oftheir IMMR and due diligence processes.

Indirect engagement does
not mean that the investor
should remain passive.

In other situations, there might bemore limited opportunities to influencecommunity engagement practices by
the intermediaries, so the investor mightfeel comfortable with the assurance
that a minimum threshold of community
engagement (for example expressedin contractual agreements) is met. This
would include investment in a larger
PBII fund without significant control, ora minority stake in a company or asset.
Such approaches can remain impactful.
For example, investors investing inreal estate projects can ensure thatdevelopers maintain good community
engagement beyond the initial realisationof the project.

www.impactinvest.org.uk | 23

The following steps in the process
are primarily targeted at investors
seeking to assume a direct role incommunity engagement. Investors
taking on an indirect engagementrole can refer to the specificguidance in section 3.5.

What is the purpose of
the engagement?
The next step should be to establish
the purpose it will serve. The investor
should establish why they are seeking
community input and, accordingly, into
which part(s) of their investment cycle
the engagement will feed.
The specific purposes for whichinvestors might seek to engage
communities include:
Developing an investment strategy
The most open-ended purpose forcommunity engagement is engagementthat will inform the development ofa place-based impact strategy at an
early stage of the investment cycle.
The purpose of such engagement is to
identify impact priorities at a local level,
to in turn feed into the design of thisstrategy. Investors typically do this toensure that investment priorities are intune with the aspirations, preferences
and needs of local people.

For example, a local authority pension
fund seeking to invest in line with
the Levelling Up White Paper’s 5%
local allocation target could engage
communities to inform what to prioritisein these investments. To do so, it could
consult with stakeholders from local
anchor institutions and a community
panel to shape the development of its
investment strategy.
Informing sector or thematic plans
Community engagement can be sought
to inform decision-making in situations
where the investor has established abroad investment strategy, for example
affordable housing or small and mediumsized enterprises (SME) finance, but islooking to ensure its approach to theseinvestments will be most relevant to local
needs and priorities.
For example, an investment fund
focused on SME finance could engage
local organisations to explore the issues
faced by local businesses to identify
ways it could help generate demandthrough its investments.29
Inputting into specific investments
Community engagement is often
done with the ambition to inform theplanning, development, implementation
or decommissioning of a specificinvestment, project, or asset. The depth
and intensity of engagement will dependon several factors, such as the stage of24 | Fostering Impact: An investor guide for engaging communities in place-based impact investingdevelopment, how large a project it is, andthe impact it is likely to have.
While not every investment will require
extensive community engagement, it will
be particularly recommended for projects
with a material impact on the community
members’ lives. In such cases, PBII
investors may seek to gain confidence
that the investment will have positive
benefits locally, and that any potential
negative impacts are understood andeffectively mitigated.
For example, an investor looking todevelop new housing infrastructure could
engage with local residents to understandwhat concerns and needs they havein regard to the proposed projects, andwhat possible community infrastructure
benefits could be proposed to themas part of the development process
to address these.
For funds that target deeper community
engagement, community engagementon specific investment decisions anddeal terms might be appropriate. A
community-led fund seeking to fund local
businesses might engage community
members to understand what investment
terms will be most appropriate, forexample in terms of payback period andrisk and return profiles. Similarly, a fundmight involve community members on
investment committees who will makethe final investment decisions.

Supporting performance measurement
and review
Insights from local communities can bea precious input to measure and review
performance, from strategy level downto specific investments, over time.
Communities can share on-the-groundexperiences of the impact investments
are and are not having, and what could bedone to improve performance.
For example, an investor in a renewableenergy facility might seek to engage with
communities to ensure that the facility’s
operations are not having unexpected
negative impacts on the communities
to surface potential causes of backlash.
The engagement can similarly serve tomonitor that agreed community benefits
are being delivered. Such engagement
can be repeated to understand evolution
over time: in the above example, theinvestor could convene a representative
community group annually to give theirperspective on the ongoing impacts ofthe facility.
In addition to that, investors should checkwith their target audience whether theircommunity engagement approach is
working or not. This might help to surface
the community’s perception of the qualityof the investor’s engagement efforts.

A community-led fundseeking to fund local
businesses might engage
community members
to understand what
investment terms will
be most appropriate,
for example in terms of
payback period and risk
and return profiles.

www.impactinvest.org.uk | 25

Community expectations on engagement: findings from the Community Cuppas
The Community Cuppas were threecommunity engagement events thatbrought together over 50 residents
in the North of Tyne area (Hexham,
Newcastle and North Shields). The
findings of the Cuppas provide insights
into community preferences regarding
engagement. Participants were
specifically asked for their viewson when community engagement
should happen in place-based impact
investing and who should be involved,
through a series of sessions jointly
facilitated by Involve and the Impact
Investing Institute.
Overall, participants felt that:• Community engagement should
happen at different stages of aninvestment: before deciding what toinvest in, before detailed plans are
drawn up and once detailed plans
are in place. This allows investors
to identify community wishes andneeds early on, and continue to get
feedback from the community asplans develop.
• Investors should first do theirresearch to see what engagement
outputs already exist and whatsimilar processes have taken placein the area. This may mean speaking

with the local authority, communityand voluntary organisations,and other investors. Community
members commit and invest timeand energy to take part in an
engagement process so processes
should not be duplicated to avoid
frustration and consultation
fatigue and save the investor
time and resource.
• The design of an engagement
process should be context
dependent and take into
consideration what investors areasking community members, theplace where the investment isbeing made, and who is being
reached. Investors should utilise
different recruitment methods,
online and offline, that areappropriate to their context.
• Community engagement is notalways accessible to everyone.
Participants called on investors
to make the effort to hear fromthose who would not usually put
themselves forward in self-selecting
methods, for example because oflack of digital literacy or lack ofconfidence to engage, or due to beinga member of a less-heard group.

• Investors should make sure toengage with a diverse representationof local people – for example througha mini public or a broad selection –alongside specific groups who are
differently or particularly affected.
Participants noted that diverse
representation gives investors an
idea of what the majority thinks andprovides an honest picture of a wide
range of views. Participants notedthat specific groups offer specialist
knowledge, and those most affectedby decisions should have their say.

The Community Cuppas
were three community
engagement events
that brought together
over 50 residents in
the North of Tyne area
(Hexham, Newcastle
and North Shields). The
findings of the Cuppas
provide insights into
community preferences
regarding engagement.

Participatory
approaches in research
While desk-based research andcommunity engagement are often
understood as separate inputs
into decisions, there are practices
that give community members adriving role in research on places.
For example, Prosperity in east
London (Piel) 2021-2031 is a 10year study tracking the prosperityof over 4,000 households in
15 areas of east London wherelarge-scale and long-term urban
regeneration is driving rapid
physical, economic, and socialchanges in local communities.30
Piel uses a mixed methods
approach that combines
household surveys withqualitative research undertaken
by citizen social scientists - local
residents employed and trainedby University College London’s
Citizen Science Academy towork as social scientists in theirneighbourhoods. Among otherbenefits, this approach offers ahyper-local look at who benefits
and how from regeneration
investments, while building local
skills and capacities.

26 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

What is the public participation goal of the engagement?
The next consideration in the process should be to establish what is the public
participation goal that the investor aims to achieve. In other words, what is theimpact that the community engagement will have?
Typical public participation goals in a PBII context include:
Figure 5: Spectrum of public participation in the context of PBII.
PublicParticipation
Goal

InformConsult

Involve

Collaborate

Empower

Description

The investor seeks
to inform the relevant
communities of theirinvestment activities in
the local area.

The investor seeks
to directly gather the
feedback of communities
on specific plansor decisions.

The investor works directlywith communities froman early stage, with apromise that concerns andaspirations will be directlyreflected in ultimate
decisions, with a clear
feedback loop.

The investor works
extensively with
communities in all aspectsof the decision, througha co-creation processthat includes co-designand co-production.

The investor supports
local communities in thedevelopment of funds
that are communityled, with decisionmaking power lying with
community members.

Promiseto thecommunity

We will keep you informed.

We will keep you informed,
listen to and acknowledge
concerns and aspirations,and provide feedback on
how community input
influenced the decision.

We will work with you toensure that your concerns
and aspirations are
directly reflected in thealternatives developed
and provide feedback on
how community input
influenced the decision.

We will look to you foradvice and innovation in
formulating solutions andincorporate your advice andrecommendations into thedecisions to the maximum
extent possible.

We will implement what
you decide.

www.impactinvest.org.uk | 27

PublicParticipation
Goal

InformConsult

Involve

Collaborate

Empower

ExampleA real estate investor
provides information, forexample by organising a
pop-up kiosk regarding an
upcoming development in
the local area.

A manager of a PBII
fund seeking to invest in
an area seeks feedback
on its proposed priorities
for investment from thelocal community.

A renewable energy investor
launches a community
investment fund, which is
capitalised with an existing
percentage of the revenuesof a local facility.

A manager of an SMEfocused fund raises
awareness of financing
opportunities available tolocal businesses.

A real estate investor seeks
to gather views from local
residents on proposed
redevelopment plans intheir neighbourhood.

Through a series ofworkshops, the investor
identifies the investment
strategy and priorities forthis fund prior to its launch.

An SME fund manager
actively collaborates with
community representatives.
The fund uses inputs
from the community on
the designing of the fundstrategy and convenes
a community advisorycommunity to provide
strategic steering and input
into investment decisions.

The community itself
drives the developmentof its own investment
activities. Such funds
typically aim to embedcommunity engagement
within the design of thefund, starting from theinvestment strategy stage
to allocation decisions andperformance measurement
and review. The fundmanager has agreed inadvance to do what thecommunity decides, acting
as a supporter, advisor andimplementer throughout
the lifecycle of the fund.

Resonance Community
Developers

The Ujima Fund

In both cases, themanagers create
opportunities for
feedback on more than
one option, and shouldcome with a commitment
to conscientious
consideration, and adefined feedback loop
as to how feedback has
influenced decision making.
Case study(see section
4.1)

Schroders Capital Real
Estate Impact Fund (UK)
Astarte/Yoo Capital Shepherd’s Bush Market

Gresham House – North
Ayrshire forestry

Barking andDagenham Giving
The REAL People’s Fund28 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

Clarifying the public participation goalat an early stage will contribute to thesuccess of the engagement. It will help
guide the investor in determining how
the input received will be used after theengagement and ensure this remains
consistent with the initial purpose.
Clarity on the goal will help the investor
to express what they need to ask thecommunity and on what feedback iswanted. This, in turn, will also ensure
expectations remain aligned between theinvestor and the community engaged.

What is the scale ofthe engagement?
The next step is to establish the rightscale for the engagement. The primaryconsideration in setting the scale ofthe engagement should be that it iscommensurate with its intended purpose
and public participation goal, as well as
the type and size of investment.
For example, the construction of arenewable energy facility is likely
to require larger-scale community
engagement than the building of a small
number of houses. Similarly, a fundmanager who incorporates community
views in its investment decisions should
develop a more extensive and sustained
engagement process than a peer who islooking to identify an investment in anarea as a one-off exercise, or to conduct

a periodic assessment of the local impactof an asset.

What outcomes andoutputs should theengagement produce?
It is advisable to think through theoutcomes and concrete outputs that are
intended to come out of the engagement
process as part of its planning.
Within the defined purpose and public
participation goal, the outcome refers
to the difference that the processintends to achieve, its overall results
and impacts – in other words, it is astatement of exactly what is soughtfrom community engagement.
In a PBII context, possible engagement
outcomes would include the identificationof local issues; opportunities andchallenges to guide investment
decisions; the generation of new ideas
for investment; agreement on directionof an investment strategy or project; or
feedback on community impact of anasset. They can also include building
support for a planned project, andidentification of community partnerships.
Secondary outcomes can also be
identified at this stage, for example better
links and trust between the investor
and the community that comes fromengagement exercises.

Outputs are the tangible products ofthe process. For example, is the investor
looking to compile a focused set ofcommunity requirements, preferences,principles, or criteria that should beapplied in investments? Is the aim
to collect broader insights to provide
additional context for the analysis ofplace-based needs? An example of acommunity engagement output, basedon the Community Cuppas, is available
in section 3.2.
Establishing the expected outcomes
and outputs from the start will greatly

facilitate the incorporation of the findings
from community engagement andensuring it fulfils the planned purpose of
the engagement.

What are the timescales
for the community
engagement?
In planning community engagement,
investors should identify the timescales
available, as different ways of doing
community engagement will demandvarious amounts of time depending on

www.impactinvest.org.uk | 29

the purpose and scale of the engagement
and methods used. Investors should
ensure that adequate time is allocatedto research, event planning, productionof materials for an engagement process,and delivery. Feeding back the findings ofthe community engagement process canbe a time-intensive process, particularly
where the engagement has delivered
results different from those that were
initially expected.

What information isalready available?
Prior to starting community engagement,
investors can save significant time andresources by building on informationthat is already available about local
needs and concerns, for example as partof local authority planning documents.
Engagement done by other organisations
can also provide a starting point for thedesign of new engagement.
Beyond efficiency gains, doing suchresearch will help investors to better
adapt their engagement to the local
context. To the extent possible, investors
are encouraged to enquire locally which
methods have and haven’t worked wellin the past and balance these insights
with their own objectives and constraints(including budget constraints). Mapping
what local engagement mechanisms are
already in place and which organisations

hold trusted relationships withvarious parts of the community
will also help identify potential
partners for the engagement.

What resources
are available?
Available resources, both in termsof budget and internal capacity, areanother important consideration inplanning community engagement.
While recognising these constraints,
investors should, where possible, aim
to adapt their resources to the needed
community engagement, rather thanthe other way around.
It may also be beneficial for investors tocollaborate with external organisations
who might bring in additional resourcing(see Appendix II for a list of specialist
organisations who can provide support).

How will successbe measured?
As a final step in planning community
engagement, it is advised to establish
upfront how the success of thecommunity engagement will bemeasured. While key performanceindicators (KPIs) will vary for eachengagement, the following qualitativeand quantitative metrics can provide astarting point:• Number of community
members engaged and numberof engagement events;• Percentage of engagement
participants who provided positive
feedback on the engagement;• Percentage of community members
engaged who have a minority and/or
disadvantaged background;• Completion and achievement ofintended outputs;• Quality and actionability of community
engagement outputs and outcomes;• Number and percentage ofdecisions that were influenced
by community engagement;• Achievement of expected timescales;• Percentage of community members
on investment panels;• Number of decisions taken bycommunity advisory panel;• Amount and percentage of investment
managed by community invested inminority-led businesses.
From an accountability perspective, it
is good practice for investors to use
selected KPIs to regularly assess, review
and where necessary update theirapproach to community engagement.
Investors doing their community
engagement through intermediaries
should also regularly review whether
these are delivering the intended
community engagement.

30 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

3.3 D elivering community engagement
Who should be engaged?
Determining who is part of thecommunity to be engaged is a key
decision to be made. The group to beengaged should be identified based onwhat the investor aims to find out as wellas the sector and type of investment.
For example, a regeneration project in a
town centre will impact local businesses,
residents and the wider community who
use the amenities. The development of amajor renewable energy projectwill impact the immediate local
community, the wider community thatmight benefit from increased electricity
generation, and impact local jobs
and supply chains. Investors should
pay careful consideration and workwith a place to identify and engage
all stakeholder groups that might be
impacted by the project.

Engaging across the investment chain – South
Yorkshire Pensions Authority (SYPA) investments (UK)
While this guide focuses on engaging
communities that will be affectedby investments, community
engagement can also be done inother parts of the investment chain.
For example, the South Yorkshire
Pensions Authority (SYPA) regularly
consults its members to take into
consideration their views about

investments. Communication andengagement at the local level areincorporated into the investment
process for a large portion of
investments. This unique governancearrangement enables SYPA tomaintain close engagement withits membership and interested
organisations locally.31

There is no “right” size for the numberof community members to be engaged
and more community members being
engaged does not necessarily meanbetter community engagement. If the
purpose of the community engagement
is relatively narrow and resourcing limited,
it might be appropriate to engage a small
group of community representatives(e.g. local organisations). Broader
engagement questions and moreresources might invite engagementwith bigger groups or the constitution ofrepresentative samples, whichmight require specialist support.
It is good practice from an inclusion
perspective to consider ways to enable
participation from a wide range ofcommunity members beyond those who
usually respond to calls to share theirviews, notably by using methods that go
beyond self-selecting groups. This could
range from drawing together a group thatis representative of the make-up of thecommunity (using the process of sortition,
as is done in a citizens’ assembly) or
engaging through local organisations togetting communities to deliver community
engagement themselves (e.g. through a
distributed dialogue process).

It is also good practice to reach out tocommunities that may be differently
impacted by the proposed investment
and those usually underrepresented inlocal democratic processes. Investors
should pay particular attention topeople who are typically ignored,as those who might be the mostimpacted (positively and negatively) by
a decision. Collaboration with trusted
organisations and community leaders
for outreach can be very effective insuch situations.
It is often appropriate to support people
to take part by offering a financial
compensation, covering costs such as
childcare, and doing engagement at atime of the day that makes it easy toattend.32 Other accessibility features
such as hearing loops, step-freeaccess, the provision of interpreters,
and the translation of recruitment
materials into different languages
spoken in the community can also
be helpful to increase inclusion incommunity engagement. The use ofdigital engagement methods offers
both opportunities and challenges
from an accessibility perspective (seepage 36).

www.impactinvest.org.uk | 31

Who can be a suitablepartner for engagement?
Investors often do community
engagement in partnership with otherorganisations, such as the local authority,community groups, other actors of
the local ‘ecosystem’ or a third-party
specialist engagement provider. In suchsituations, the investor typically works
with these organisations to develop,
implement and/or report on a community
engagement approach.
Joint engagement with partners canbring a host of benefits depending on thenature of the partnering organisations:• Working with a local community
organisation can deliver a richer
understanding of local needs andmeaningful engagement to help
address the perception of superficial
consultation or consultation fatigue.
They can also help to identify keygroups to be engaged in the process
who might otherwise be missed.33• Working with a local authority canhelp ensure better coordination withpublic actors and give both partners
confidence that the project for which
community engagement is sought isaligned with local priorities, as reflected
in Local Plans, master planning, andother planning documents that are astatutory requirement - see box below.

• Working with an organisation
specialising in community engagement
can bring in additional resources andexpertise. Facilitation by a third party
that is seen as independent canfurther help to build trust with thecommunities engaged.
To find suitable partners, it is advisable
to research and engage with local
impact investing and/or community
organisations and networks - suchas the local authority, civil society
organisations, universities, and businessgroups who can help provide an initial
mapping of suitable partners as well as
associated opportunities and risks. When
working in partnership, it is advisable todecide on the roles and responsibilitiesof each organisation involved to ensuresmooth ways of working and clear linesof accountability.
Compensation expected by different
types of partners will vary. Organisations
specialising in community engagement
are likely to charge a fee for theirservices, while local authorities are not.
Local community organisations andnetworks should be compensated at a fairrate according to the services delivered,unless they have expressed a preference
to the contrary.

Partnering with public authorities
Working in partnership withlocal authorities is often a win-win
arrangement for all parties. Suchpartnerships can support thedelivery of projects based oncomprehensive community
engagement that are backed
both by public and private actors.
In the UK, the process of local masterplanning provides a useful framework
for collaboration between local
authorities and PBII investors. All local
authorities are required to have an upto-date Local Plan, which sets out an
overall vision for future developmentof a place. For specific developments
there is a statutory requirement tocreate a master plan which engages
the local community and stakeholders.
Investors and developers can partnerwith local authorities to delivercommunity engagement for this,while local authorities can remainin the driving seat by coordinating
engagement efforts and maketheir outputs widely available.
For example, in 2023, the Innovation
District Manchester Partnership– a joint venture between Legal &General, University of Manchester

and Bruntwood SciTech, announced aconsultation period for their ‘Strategic
Regeneration Framework’ which
included community events and online
feedback channels, with all findings
being reported back to the investors
and Manchester City Council.34
Partnering with local authorities
leverages the respective strengthsof public and private actors. In thecontext of social and affordable housing
strategies, for example, it might not
be fruitful for an investor to conductengagement to understand local
needs on housing. Engagement on
issues such as mixing tenants (social/affordable/shared ownership) andunit types (e.g. homes for families orindividuals, houses or apartments) will
benefit from the democratic legitimacy
of a local authority. On the other hand,
the registered provider that operates
these assets can conduct community
engagement with residents to surface
day-to-day issues, opportunities for
improvement and, in some cases,
support services such as for example
help with financial management toprevent indebtedness or courses toimprove employment opportunities.

32 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

Which method(s) should be used for community engagement?
There is a range of methods available to
do community engagement. The rightmethod should be identified according
to key elements of the community
engagement that were previously set,
including its purpose, public participation
goal, expected outcomes and outputs,
timescales, target community, and in lightof available information and the resourcesof the investor and their partners.
Clear answers to these questions will
help inform which method will be most
relevant to deliver the community
engagement. Methods can be combined
and adapted depending on the context
of each investment.
The methods below are classified
according to the public participation goalthat they are most commonly used toachieve. This is not a comprehensive list;

Cost

additional methods can be foundon the Involve website and Participedia,
a global database for researchers,
activists, practitioners, and anyone
interested in public participation anddemocratic innovations.35
The next section gives an indicative ideaof different methods based on costings,
using a not-for-profit consultancy forsupport, design, and delivery. The cost,
timings and staffing need for different
methods are dependent on the specificsof the community engagement andproject, and what external expertise
will be sourced.
While they might require more resourcing,
more ambitious methods are generally
deemed as more robust and rigorous, andmight be worth the additional expense
given the legitimacy they provide.

Timeframe

Consult

However, more expensive or costly
methods are not necessarily betterand the specific circumstances of eachengagement should remain the primary
driver of selection.

While they might require
more resourcing, more
ambitious methods are
generally deemed as
more robust and rigorous,
and might be worth theadditional expense given
the legitimacy they provide.

Human Resource

under £25,000

under 3 months

low resource£25,000 - £75,000

3-6 months

medium resource£75,000+

6 months+

high resource

Focus groups
A facilitator leads a
guided discussionof 8-12 people togauge their views
and attitudes on thesubject on which the investor
aims to engage the community.
Focus groups provide useful
information on how people respondto questions or issues, and theresearcher takes notes. The
participants are not expected
to reach a common conclusion.
Pop up stalls
Pop up stalls area temporary formof engagement
located around thecommunity, forexample outside of a supermarket,
at sporting events or at local
markets. The stalls might ask people
to add comments about what they
do or do not like about their local
high street.
Feedback kiosks
Feedback kiosks
are electronicallyoperated touch
screen devices

www.impactinvest.org.uk | 33

which can be placed in any space. They
are often seen in public spaces such as
hospital waiting rooms and ask people’s
opinions without them having to be
staffed. These methods allow to engage
people where they are. The information
provided can then be analysed and fed
into other processes as evidence.
Community
conversations
Community
conversations areconversations facilitatedwithin groups ofcommunity members. An investor canengage with these groups in their own
space, to give them greater freedom
to express themselves in a safe
environment, free from potential harms
in a broader group setting.
Community panel
A community panel
convenes a group of
up to around 25 people
representing local
community groups and specific actors
with an interest in the investment who
would not otherwise be heard. The panel
can be convened as a one-off or as an
ongoing engagement structure, andmight be granted a formal advisory role.

Crowdsourcing

Deliberative workshops

Crowdsourcing is thepractice of obtaining
services, ideas,
functions, or contacts
from a large andundefined network of people.
Crowdsourcing is a predominantly
online practice, although it can be
carried out offline. While often used
towards a Consult goal, crowdsourcing
also offers an opportunity to fulfil
deeper public participation goals
with relatively low barriers.

Deliberative workshops
are small-scale
workshops where thefocus is on having
in-depth informed
discussion on a topic to reacha shared conclusion. A facilitator
will usually work with no more than
8-12 people in a single group, althoughmultiple group discussions can takeplace simultaneously.

Involve
Conversation cafés
Conversation cafés
are a trade-marked
process for running
informal, hosted, drop-in
discussions in a café
style setting. The process assembles
small number of people, usually up to
10 people, plus the host, and a time
is given for discussions. The host
gives the people at the table one ormore questions for them to discuss.
Participants have the chance to share
their views in order, followed by dialogue
and a reflection at the end. Conversation
cafes usually last 1-2 hours.

Mini publics(citizens’ assemblyor citizens’ jury)
Mini publics bring
together a group ofpeople who closelyreflect the local population interms of demographics (such as age,gender, ethnicity, and social class) andsometimes relevant attitudes. Together
these people discuss an issue and reacha conclusion about what they thinkshould happen. Mini publics tend to follow
a three-step process where members:
1. learn about the issue;
2. deliberate it with one another weighing
up different potential conclusions;
3. and decision-making where theyagree a way forward.

Mini publics can range in time and depth.
Citizens’ assemblies will involve around
100 members who are brought together
to explore an issue over multiple
days and meetings. A citizens’ jury is
generally composed of a smaller groupof people - around 12-24 community
members – over a shorter amount oftime. A public forum can be held where
the jurors present their findings andrecommendations and explain how theyreached their decision.
21st Century
town hall meetingTechnology brings
together 500-5000
people, combining small
scale discussion withgroup decision making. The participants
are split up into groups of 10-12 people,
where they have facilitated small-group
discussions. Each facilitator uses a
networked computer to instantly collate
ideas and votes from the table. This
information is sent to a central point
where a team summarises commentsfrom all tables into themes that canbe presented back to the room forcomment or votes. The whole process
can either take place within one room,or groups can gather in many locations
around the country or globally.

34 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

Distributed dialogue

Participatory futures

A distributed dialoguesees the commissionerof the engagement
creating an event
design pack, which is
given to different groups for them to
run it themselves. The engagement iscentrally planned, and dialogue events
are self-organised by participants,
with the aim of engaging a wide rangeof communities and organisations.
The groups or individuals organisingdialogues enjoy a high degree of
autonomy over who is involved.

Participatory futuresencompass a range ofapproaches for involving
the community in
exploring or shaping
potential futures. For example, a series
of workshops might bring together adiverse group of community members
to consider the possible implicationsof interventions (for example impact
of just transition plans) to understandthe possible implications for jobs, thecommunity and the natural environmentand discuss priority areas for action.
These approaches aim to democratiseand encourage long-term thinking,encourage public imagination about
how the future could be, and translate
images of the future into collective
actions and behaviours in the present.

Collaborate
Co-creation
Co-creation
methodologies enable
active participation bycommunity members as
designers and implementors. In practice,
it means that those who are affected bya decision are not only consulted, but arepart of the conception, design, steering,
and/or management of the fund or asset.
This can be a highly effective approach,but it is resource intensive as it is often
essential to support the participants andprofessionals throughout the exercise toensure that they are able to contributeon an equal footing, for example byproviding information, training, mentoring.

Empower
Participatory
approaches to budgetingand decision-making
Participatory budgeting
involves community
members directly inmaking decisions about budget issues.
This can take place on a small scaleat the service or neighbourhood level,or it can be done at a city, regional or
national level. In practice, the powerdelegated to the community membersin the decision processes varies,
from providing decision-makers with
community preferences to processes
that place parts of the budget under
direct community control.
It can be run as a one-off process, but
long-term benefits such as social capitaland ownership, require a recurring,
cyclical process. Participatory budgetingcan deliver increased transparency
and establish the legitimacy of budget
decisions. It has also been shown
to build the skills and awareness ofparticipants through the processof deliberation.
Similar to participatory budgeting,participatory policymaking seeks tohand community members influenceand control over different aspects ofdecision-making. In an investment
context, participatory approaches
may be used to give community
members decision-making poweron the development of investments
policies and strategies, as well as on
specific investments.

Community
decision-making
in investment funds
Community members
can be directly
represented in relevant
decision-making bodies of investment
funds. These might include committees
responsible for setting investment
priorities, investment committees,
and impact assessment committees.
Another model is to have communities
represented through a specificmechanism, such as a community panel,that has a decision-making role. While
the potential in terms of community
engagement is significant, community
members might also require support inorder to effectively fulfil their tasks.

www.impactinvest.org.uk | 35

Combining methods for effective community engagement
Newham Council, in partnershipwith the Royal Docks Team - a multidisciplinary local government teamthat works in partnership with local
community groups, developers, andlocal businesses - is running a largescale project to improve the RoyalDocks Corridor in London. The project
aims to create 60,000 new jobs and25,500 new homes in the wider area,
provide general uplift by creating public
spaces, wider pavements, cycle lanes,

better connections to local destinations,while improving air quality and delivering
more green spaces.36
Given the complexity and scale ofthe project, community engagementwith residents and businesses wasdone through different channels,
demonstrating the benefits of a mixed
methods approach. Methods included
online engagement consisting ofsurveys and a Q&A forum and printed
publications to increase accessibility.

The survey received 185 responses
that also included up to 572 detailed
free-text comments. Paper leaflets
were provided that included backgroundinformation and a plan of the project
area. Direct engagement consisted offour sessions held for local residents todiscuss proposals, provide comments
and ask questions, two of which were
held online. Analysis showed that
overall, the scheme was strongly
supported by the local public.

36 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

Is digital or in-person engagement person better?
Technology-enabled tools have been
gaining in popularity to support anddeepen community engagement.
Examples include:
60 Decibels is a tech-powered impact
measurement consultancy that helps
organisations to maximise and collectimpact data through community andend-user engagement. 60 Decibels
works with corporations, investors,
funders, NGOs and social enterprises
globally. To gather impact data, 60
Decibels research assistants speak to
impacted communities, by phone andin the local language. 60 Decibels thenproduces short, standardized surveys
built for repetition and comparability,
including with industry peers.
Built-ID is a B Corp, community-centricsoftware company that aims to support
decision makers in including diverse
voices in change-making processes.
It does this through an award-winning
digital community and engagement
platform, Give My View. The platformsupplies digital tools includinginteractive surveys, working with theclient to design tailored approaches
based on specific communities andprojects. Built-ID has worked with UK
councils including Flintshire and Milton

Keynes, as well as the City of London,
Socius and FORE Partnership.
Commonplace utilises social media
promotion to encourage and generatecommunity engagement and gain
feedback from those who are directly
affected by changes. For example, it
was used in Catford Island in London
to help gain community opinion on
the regeneration of a dense urban
environment to create a new public
community space. Community
engagement took place at different
stages of the project, with a first roundengaging the local community on theplatform to discover what vision of
Catford they would like to see cometo life. A follow-up communication
campaign enabled a more inclusive
reach accessing younger generations.
Through utilising social media,
advertisements of the project reachedover 44,000 people, equivalent to 90%of the local population, to feed back on
the proposed development project.37
Hello Lamp Post is a digital platform
aiming to make community
engagement more efficient andcost effective. It uses a two-way
communication platform that
communities can access at any time byscanning a QR code present onstreet objects or urban environments.
Through text-based chats, Hello
Lamp Post empower communities toinfluence the development of theirlocal area. The digital platform has apresence across fifteen countries andhas facilitated engagement with morethan 300,000 people.
Polis is a real-time system forgathering, analysing, and understanding
what large groups of people think,enabled by advanced statistics andmachine learning. Polis enables online,
scalable discussions on chosen topics,
involving participants that are, forexample, residents in a local area, users
of a service or interested in a specificissue. Due to its open-source nature,
Polis is highly customisable to a variety
of situations and community sizes.
The growing availability of these tools
has led investors to ponder whether
they should do digital or in-person
engagement. Digital engagement
approaches have clear advantages,
including the ability to reach larger
numbers of people in a relatively costefficient manner. Investors should,
however, ensure that such approaches
do not lead to exclusion of community

www.impactinvest.org.uk | 37

members who are less able orprefer not to engage digitally.38 In
addition, there is some evidence
that in-person events can be more
effective from a relationship-building
perspective. Investors seeking tobuild local networks and trust might
therefore keep engaging through inperson methods.
Some PBII actors have beensuccessful in using both digital andin-person methods. Socius, an impactfocused developer, have used Give
My View to consult communities indifferent languages, including to reachSomali speakers in Bristol. Digital
engagement helped them reach awider audience, especially those
who cannot attend face-to-faceengagement events, for example due
to disability, working patterns or care

responsibilities. For its Soapworks
project, Give My View enabled Socius
to receive feedback from 5,888 people
across two rounds of consultation,
the vast majority of these people
being local. Socius have utilised digital
exhibitions, allowing people to view
consultation content as if they wereat an exhibition, but from their own
home, which again associatedaccessibility benefits.39
In parallel, Socius have also heldin-person community events, which
included both community engagement
but also activities to create deeper
relationships and links with the local
community. These events included
local caterers and baristas, childfriendly entertainment and fundraising
for local charities.

How should investors
communicate with thecommunity engaged?
It is important to be clear and transparent
about the community engagementthat is being planned or undertaken.
From the start and throughout theprocess, investors should communicate
as openly as possible about the purpose
and form of engagement. Communication
can help get people interested, ensure
people are kept informed and close
the feedback loop.
Investors should remain aware that
communities can have unrealistic
expectations about what is possible andlimited understanding of what it takes tomake a project or investment financiallyor technically viable. Clear communication
can help to reduce risks of misaligned
expectations between the investor andthe community, which might negate
some of the expected benefits ofcommunity engagement.
To communicate on the engagement,
investors are advised to use clear
and plain language to makecommunications as accessible aspossible. They should also considertranslating materials into other languages
if relevant for local communities.
A range of communication channels canbe used – for example combining digitaland social media with more traditional
methods such as posters and local press– to reach the highest possible proportionof the target community.
For investors engaging communities
directly, sustainable community
engagement can also be fostered bycreating spaces that encourage dialogue
on an equal basis and are a two-way38 | Fostering Impact: An investor guide for engaging communities in place-based impact investingexchange. Investors might wish toremain present in the local area andwider community events outside of their
specific engagement activities and have asystem in place for community members
to reach out to them. Another powerfulapproach is to identify champions in thelocal community, for example community
organisations with whom the investor canestablish a relationship, spreading theword about its community engagement
and model positive relations.
Where there are opportunities forcommunity involvement in decisionmaking (for example on a community
advisory panel or investment committee),these should be clearly and openly
communicated to community members.

How should the feedback
loop be closed?

3.4 S
 ustaining community engagement

Community engagement findings should
be captured as outputs and feed backinto the elements on which community
input was sought, based on the identified
purpose and expected outcomes of theengagement. Section 3.2 provides anexample of what community engagement
outputs might look like, based on theCommunity Cuppas. Community members
should be given the opportunity toprovide feedback on the engagement
exercise, for example through a feedback
form. It is considered good practice toinform community participants of theoutcomes of the engagement, and any
resulting changes made, to build trust. This
reporting back should be consistent withthe “promise to the public” corresponding
with the chosen public participation goal.
In some cases, it might be appropriate to
do follow-up community engagement,
for example if the engagement has
resulted in unexpected findings onwhich more community input might beuseful. Follow-up engagement can also
be done as the investor moves further
onto implementation, for example if
initial engagement was done on a broad
investment strategy and could now be
implemented to inform sector, theme, orinvestment-level considerations.

How can investors embedcommunity engagementin their activities?
To ensure community engagement issustained, investors should integrate
community engagement into existingprocesses used to assess, monitor andmanage investments. This can be done
either from an ESG or impact perspective,
as is most relevant to their practice.
Leading sustainability standards
such as the Global Reporting Initiative(GRI 413: Local Communities), the GIIN’s
IRIS (Community Strategy OI2319)
and the National TOMs40 are increasingly
incorporating indicators on
community engagement.
Where appropriate, investors canalso include community engagement
as an explicit criterion for selectionof investments, including funds,
asset and companies. They can also
include community engagement asa consideration in their standard due
diligence processes.
Additionally, investors might want to put
some of their own “skin in the game”, forexample through implementing internalfinancial incentives for delivering on
community engagement promises. Thiscan help address the perceptionthat asset managers set highcommunity engagement expectations
to win mandates but then fail to deliveron their community promises andongoing engagement.
As investors grow confident with theconcept and practice of community
engagement, they might also reflect on
their own role and practice and consider
exploring more stretching approaches
to community engagement. This could
mean doing more direct community
engagement across their portfolio,
expanding the purposes for which
community engagement is done or
moving their engagement further along
the Spectrum of Public Participation.

www.impactinvest.org.uk | 39

Community panels in organisational governanceCommunity panels that advise andinput into decision-making on a regularbasis can be constituted in the context
of a specific fund (see for example
Ujima Boston case study on page 48)
as well as to advise investors as part oftheir general governance. For example,
Social Investment Business (SIB) has
operated a Community Panel since2017. It brings together community

How can investors
communicate externallyabout their community
engagement?
Investors might wish to report on theircommunity engagement in contractualand public documents, such as investor
and annual reports, as well as in theirthought leadership, to continue signalling
their commitment to community
engagement. Some investors, particularly
those who expect to conduct regularcommunity engagement, might seek torepresentatives and customer
groups targeted by SIB with amandate to support its work in various
ways, including strategic input, scoring
for recruitment and testing practicalitems from an accessibility perspective(e.g. application forms, survey
questions). Community Panelmembers can also become membersof SIB’s investment committees.

formalise their community engagement
approach, commitment and/or policies
in a public document to further increase
trust and transparency.41
Community engagement can often
produce effective case studies to be
used as part of these documents. It is,however, essential that the spotlighted
community engagement has beendelivered with integrity to avoid
accusations of tokenism or “communitywashing”. Examples of effective casestudies integrated in investor reports
are included below for inspiration.

40 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

3.5 D oing community engagement
through others
Rather than delivering community
engagement directly, many investors
choose to take an influencing, or
stewardship role, in community
engagement. In such a role, theinvestor aims to influence the relevantintermediaries (for example an underlying
fund manager or the management of aninvestee company or asset) towards better
community engagement practices.
Engaging with communities indirectly isusually a simpler process that requires
fewer resources. It does nonethelessrequire thoughtful probing of theintermediaries who will be doing thecommunity engagement.

Engaging fund managers
Investors such as asset owners who
outsource the management of their funds
can make clear their expectations that
their fund managers, and other actors
such as investment consultants, takea proactive approach to community
engagement. These can be included asconsiderations in mandate searches and inengagement with prospective or existing
fund managers. Where possible, fundmanagers should be encouraged to follow

the steps in sections 3.1 and 3.2 above toensure they adopt an effective community
engagement approach.
To start the conversation, below are
specific questions that can be raised withfund managers:• How are the needs of local communities
reflected in the fund’s strategy?
Specifically, what is the fund’s approachto community engagement? How was
it developed? How does it compare withthe recommendations of this guide?
• Has the fund integrated community
engagement into existing processes
used to assess, monitor, manage andexit investments? Does community
engagement feature in the fund’s due
diligence process with prospective
investees? If applicable, is it part of its
broader ESG or IMMR approach?
• What metrics are used to assess
performance on community
engagement? Are these quantitative,
qualitative or both?
• How often does the fund reporton performance regarding
community engagement?

• How is community engagement
resourced? Does the investee
have skills and expertise inhouseor an external specialist that
supports and advises them oncommunity engagement?

Engaging investee
companies and assets• How do the needs of local
communities factor in theinvestee’s operations?
• Does the investee have a community
engagement process?
• Does the process follow good practice(it might be useful here to draw on
the step-by-step guide in the section
above and the pitfalls in section 4.2)?

More often than not, investee companies
and assets are likely to have someprocesses for community engagementin place, for example within their CSR
strategy. Companies and assets
operating in highly regulated sectors suchas real estate and infrastructure are likely
to be more experienced with community
engagement. Companies that areundergoing a transition, for example thosein highly emitting industries, might also be
conducting community engagement as
part of their transition planning.

• Has the process been in placesince the outset of the company
or the project?

While the present guide is primarily
targeted towards investors, it might behelpful to other managers of investee
companies and assets to further
enhance and deepen their community
engagement approach.

• What metrics are used to assess
performance on community
engagement? Are these quantitative,
qualitative or both?

The following questions can be useful
to assess and monitor the level ofcommunity engagement undertaken byexisting or prospective investees:• Is the process reviewed and updated
at least annually?
• What evidence is there thatengagement has informed theinvestee’s plans and decisions?
• Does the investee regularly report oncommunity engagement performance,
for example as part of its ESG or
impact reporting?

• What resources and budget has theinvestee allocated to community
engagement? Does the investee
have skills and expertise inhouse or
an external specialist that supports
and advises them on community
engagement?

www.impactinvest.org.uk | 41

Resonance – Investor-investee partnerships oncommunity engagement
Indirect community engagement
does not mean it is not active.
Resonance, a social impact property
fund manager, as part of its Plymouth
investment portfolio, has encouraged
and supported investee companies toengage relevant communities in waysthat are complementary and can be
mutually leveraged.
For example, Resonance has worked
with Nudge, a hyper-local community
development initiative to redevelop
Union Street. Such a focusedinvestment has helped to engage
people who have a strong interest inthat locality and who might usually
not participate in the development
or redevelopment strategies if
defined at a city level. With support
from Resonance, Nudge run regularcommunity engagement eventsand activities.
Resonance also works with Real
Ideas, a social enterprise that has
redeveloped multiple locations in
Plymouth with a focus on serving
particular user groups and needs whilst
improving specific locations.

Resonance has further supported
ground-up engagement throughMemory Matters. Memory Matters
has asked people with dementia in thecity what would be useful to them andwhere before launching their memory
café. This meant that they were
offered large amounts of donations tocreate different zoned areas within thecafé representing different decades
which was used to create the space
their eventual customers wanted.
Resonance sees such engagement
as a win-win scenario, as it helps
the investor to develop a deeper
understanding of the place while
helping its investees implement andimprove their approach to community
engagement, which in turn benefits
their own business operations.

42 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

3.6 A
 voiding common pitfalls
Investors looking to develop a community engagement approach should be aware ofcommonly encountered pitfalls. These pitfalls can result in the benefits of engagement
being dampened or, in some cases, negated.

Pitfall 1

Pitfall 2

Pitfall 3

You are asking for input on something forwhich a decision has already been made.

You don’t know what you will do with theoutputs of an engagement process.

There is not sufficient time or resource
allocated to allow for meaningful engagement.

There should be a clear decision that your community
engagement process will feed into. A well-defined
purpose enables you to ensure that the rightmechanisms are in place to transform the process
outputs into outcomes. You should allow adequate
time for an engagement process to happen, so
you do not get the results too late for them to be
conscientiously considered.

There must be sufficient opportunity for community
members to participate in an engagement initiative.
Community members need to know about eventswith enough notice to be able to attend. Participants
need to be allowed to digest and reflect on theinformation they received during events. It is also
important to think about resources, such as forexample travel costs, that can help make an event
accessible. Expenses should be covered at the very
least so that participants are not out of pocket forparticipating in an engagement process. You may
go further and offer a thank you gift or honorariumfor participants.

A good community engagement process makesa difference – to participants, to investors, andto projects. Community engagement should takeplace while the questions you are asking membersof the community are still at a formative stage. A
final decision on these issues should not have yet
been made or predetermined. This will also help toavoid perceptions that the community engagement
exercise is tokenistic and/or “community-washing”.

www.impactinvest.org.uk | 43

Pitfall 4

Pitfall 5

Pitfall 6

The outcomes of the engagement process
are not fed back to the participants.

Waiting for a crisis to arise before
doing community engagement.

Organisational arrangements to support community
engagement are not in place or insufficient.

It might be tempting for investors to see community
engagement as a reactive exercise, for example
as part of damage limitation following negative
scrutiny of an investment. To unlock all the benefitsof community engagement, it should be done aheadof such situations arising. There are also examples
of community engagement that originated indamage limitation following a crisis becoming anestablished longer-term approach, as the community
engagement practices become more familiar and partof the company’s regular process.

Meaningful community engagement requires
commitment and resourcing and, for most investors,
invites a re-think of business as usual. As astarting point, investors seeking to do community
engagement should ensure there is sufficientconsistency and investment in internal structures
to support this work and lead to constructive
community relations. Ideally, there should be a teamformed and trained to engage communities. This teamshould be given sufficient autonomy and resourcesto negotiate and make decisions, access informationand contact people throughout the organisation. As
the investor’s confidence in engaging communities
increases, the team can then be expanded and/or
replicated in other parts of the business. In all cases,
investors doing community engagement should
ensure that they have the right capacities to fulfil
the “promise to the public” that is associated with
their public participation. Putting in place capacity torespond and implement identified change should be a
key consideration.

There is a common misconception that a good
response to community engagement is to do
everything that the community says. A good
response should instead conscientiously consider
what the community says and provide a responseto them about what you are doing, what you’re
not doing, and why. There are two key factors forconsideration. Firstly, you should be clear at the startof the engagement about what is open to change andwhat isn’t, so you’re not asking people to feed backon things that aren’t open to change. Secondly, you
should do the engagement with the genuine intention
to listen to what people are saying. It is surprisingly
common for people who have done engagement welland have conscientiously considered the outputs
not to have communicated the outcomes to theparticipants, who erroneously feel they have not been
listened to. This last step of closing the feedback loop
shouldn’t be forgotten.

44 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

4. Good practice:
What can we learn from others?
This section provides a
selection of case studies
that can be drawn upon by
investors seeking to engage
communities, mapped
against specific public
participation goals.

T

he case studies in this section
offer a broad, but not exhaustive,
view of the fast-evolving practiceof community engagement in the UK
and globally. The case studies are further
mapped to the public participation goalof the engagement (see Spectrum of
Public Participation in section 3.2).

www.impactinvest.org.uk | 45

4.1 How to consult
Case Studies:
Schroders Capital Real Estate Impact Fund (UK)42
The Schroders Capital UK Real Estate
Impact Fund aims to address social
inequality in the UK and deliver a riskadjusted financial return. By investing
in affordable and social housing, town
centre regeneration and supporting
increased employment, the Fund aims
to deliver a positive impact on people,
place and planet, focusing on deprived
areas of the UK.
As part of its strategy, the fundemphasises how hearing andresponding to the community voice
is important to meet the needsof local communities. Community
engagement is facilitated through longterm stakeholder collaboration andneeds-based analysis. The investment

and asset management phases
include early and regular community
engagement through a range of
methods including consultations,information collection, and forums toprovide feedback.
This engagement is also used toqualitatively measure the social
impact of investments once theprojects are in use. The outcomes
form the narrative element of theFund’s annual social impact reportalongside quantitative metrics,
undertaken by an independent social
value consultant, to assess objectively
how the fund is progressing towards
achievement of its impact objectives.

Astarte/Yoo Capital Shepherd’s Bush Market (UK)43
Astarte in partnership with its platform
member Yoo Capital Investment
Management (YCIM), have sought
to create positive community
impact in Shepherd’s Bush Market,
a 109-year-old market situatedin the heart of west London. Afterbecoming the majority owner of themarket in 2020, YCIM launched an
active programme of community
consultation as part of the preparationof a proposal for the redevelopmentof the market and its adjacent sites.
A consultation was conducted via
drop-ins, online engagement, and aseries of workshops and one-on-one
meetings with market traders. A totalof 33,000 people were invited into
the drop-in events. The community’s
feedback helped to shape the proposal,

comprising of a redeveloped market
as well as new housing and businesspremises in adjacent sites, that was
submitted to the local authorities.
The broader outreach programme
includes sponsoring school events,
giving space to charities, and working
with local organisations to coordinate
community efforts. YCIM have also
worked with an external firm, appointed
to manage Shepherd’s Bush Market,
to launch a ‘High Street Incubator’.
The incubator is the first of its kindin London and offers free training toexisting traders and Londoners withbusiness ideas, as well as access tosmall format affordable trading spaceand ongoing support to businesses
actively trading in the market.

46 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

4.2 How to involve
Case Studies:
Gresham House – North Ayrshire forestry (UK)44
Gresham House is a specialised
asset manager. Among its
investments are forests it
manages in the UK, Australia,
and Ireland on behalf of various
investors, including institutions,family offices, private clients, andfunds. Gresham House purchased
a 3,450-acre site in North Ayrshire,
Scotland to establish a sustainably
managed productive forest that
included diverse species, peatland
restoration, access for local
communities, and a run-of-riverhydro scheme. Despite the site
being poor-quality agriculturalland with limited biodiversity, theinitial tree planting application andenvironmental assessment took
seven years to approve.
The active involvement of
the surrounding communities
accompanied this process. During
this period, the Gresham House

team and woodland managers
met regularly with local groups todiscuss all aspects of the scheme.
Local community reactions tothe site were varied, with accessprovisions and species diversity
high on the list of demands fromlocals. In response to community
feedback, the management teamdesigned a considerable networkof paths throughout the forest
and replaced a key footbridge on
the footpath network to support
community access and recreation.
It also planned the forest toincorporate a wide range of tree
species to improve the biodiversityof the site, well above therequirements of forestry standards.
The forest is now being developed
following approval. Trees are in
their establishment phase, and thehydro scheme is being expanded
to generate more renewableenergy for the local area. Accessrequirements are constantly being
discussed and developed with a
Local Access Group, with whom
the Gresham House team havebuilt a strong working relationship.
In 2022, the Forestry division’s
asset and woodland managers
had over 140 interactions withlocal communities, reflecting
the commitment to address
local communities’ views, whereappropriate and to the extent
possible, in their forestry activities.
The team’s commitment is
to include local communities
in all forest development andmanagement actions, engaging
them throughout the process
and trying to provide for as many
competing interests as possible
while still ensuring the deliveryof investment strategies fortheir clients.

www.impactinvest.org.uk | 47

4.3 How to collaborate
Case Studies:
Resonance Community Developers (UK)Resonance is a pioneering social
impact property fund manager
managing a total of over £350m.
In 2022, Resonance launched
Resonance Community Developers,with £9m in funding from Big Society
Capital and the Access Foundation.
This social impact fund is designed tohelp communities meet local needs
by creating and owning incomegenerating assets, such as affordable
homes, sports and leisure facilities
and renewable energy generation.
The target fund size is £100 million,
with a target return of 4% and aminimum five-year term. The fund has
made initial investments in community
projects across three areas of theUK, in Cornwall, Gloucestershireand the North West.
The fund follows a strategy ofcommunity engagement through thealliance forged with community groups,
such as a local Community Benefit

Society, a type of social enterprisethat reflects commitment to thewider community, with profits being
ploughed back into the business. It
supports these groups at every stageof their journey, including establishingthemselves, engaging with their wider
community and bringing to life theirproject ambitions, with both financeand sector expertise. The Resonanceteam, together with Associates, workwith these community groups throughclose co-operation and support,
engaging with them through face-toface meetings, workshops, and online
consultation. Many community-basedorganisations do not have the benefit
of full-time staff. They are often madeup of volunteers and are therefore
reliant on the Resonance team. This
engagement process is continual,even after the project is completed,enabling Resonance to work with theorganisation on impact measurement
and new projects.

48 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

4.4 How to empower
Case Studies:
The Ujima Fund (Boston Ujima Project, US)45
The Ujima Fund is a social
investment fund that sets out toempower and finance Boston’sBlack, Indigenous and other Peopleof Colour (BIPOC) entrepreneurs,
most specifically where there isa severe racial wealth gap. The
fund demonstrates a vision of acommunity-controlled economy
through popular education. It pools
investments from institutional
investors, Boston residents andother individuals from outside of thecity. In 2021, Ujima raised $4.5m ofinvestment capital and has invested
approximately $1 million across six
different businesses.
The fund has two governing
bodies that oversee investment
activity: the Community Standards
Committee, responsible for setting
investment priorities, and theInvestment Committee, which
prepares recommendations topresent to the voting members.
These committees include current
and displaced working-classresidents, grassroots partnerorganisations, community businessowners and their employees.
The fund supported a community
development fund acting as apillar for economic development
and social justice initiatives in
Boston’s Roxbury neighbourhood.
Local residents were engaged inassemblies both at neighbourhoodand citywide levels, creating
community-led plans for the fund.
The fund partnered with community
organisations to provide loans,investments, and technicalassistance to help businesses
and organisations succeed.
Communities had complete control
over the design of the funds being
created, from the partnerships madeto legal designation. Additionally,

the convening of business leadersand development of a ‘communityapproved’ business network helped
gather information about thefinancing needs in the community
as a means of influencing
investment tools. Examples ofbusinesses supported include Cero,an organic waste management
service, as well as Comfort Kitchen
and Kush Grove Clothing, whoreceived up to $200,000 in loans to
support their work and mission.
The Ujima Fund gave citizens
more voice and decision-making
power and helped to increase
access to capital for businesses
and organisations in the Roxbury
neighbourhood of Boston. This
led to job creation and further
economic development. Even withthe high level of control ceded to thecommunity, investors still earned agood risk-adjusted return.

www.impactinvest.org.uk | 49

Case Studies:
Barking and Dagenham Giving (UK)46

The REAL People’s Fund (US)47

Barking and Dagenham Giving (BDGiving) was set up in 2020 to give
local people more opportunities toparticipate in local decision-making.
Funding and investment decisions are
made by residents to achieve social
good in one of the most deprived
and diverse boroughs in England.
BD Giving provides funding to local
businesses and non-profits.

The REAL People’s Fund is a $10m
fund, investing in BIPOC-owned
businesses in the East Bay of
California. The fund is a community
capital fund, designed and developedby six grassroot organisations aiming
to provide equitable access to capital.
Its structure allows for a collaborationof various organisations: Community
Vision, a community development
finance institution (CDFI), underwrites
and administers larger loans, Uptima
Entrepreneurship Cooperative
provides technical assistances tobusinesses, and the Runway Project
gives access to early-stage financing.

While there are a growing number ofimpact-first social investors in theUK, BD Giving is the first to adopt a
100% community-led investment
decision-making process. The
Community Steering Group (CSG)
advises BD Giving and is organised
into a peer learning group. The groupare all women – some are Peopleof Colour, mothers, local businessowners – each member brings
unique professional and personal
experiences, while having agreed on aset of shared values. All are residentsof Barking and Dagenham.
The CSG designed an investment
policy for the community thatbalances impact, risk, and return ininvesting. BD Giving recently selected
Snowball, an impact fund, for its firstinvestment. They have also launched
an investment vehicle for local
community enterprises - the GROW
Fund - with the ambition to scale the
BD Giving model while remaining true
to their values.

The fund is community-based and has
a BIPOC-focused leadership,
incorporating their expertise toempower marginalised communities.
Community members can invest in
the fund from $100, at 3% interest.
Community investors elect a member
to the board. Further community
engagement is supported throughfocus groups, surveys, and public
meetings. The REAL People’s fundhas increased access to capital forsmall businesses and community
organisations – supporting the East
Bay area. The fund reported anaverage return on investment of 9%
for its investors.

50 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

Appendix

www.impactinvest.org.uk | 51

I. Community engagement checklist
The below checklist summarises the key steps in planning, delivering and sustaining
community engagement, as well as key questions that investors should ask
themselves at each stage of the process.
Familiarise yourself with thecharacteristics of successfulcommunity engagement: How
does your engagement reflect thecharacteristics of appropriateness,
continuity, additionality,
collaboration, inclusion, reciprocity,transparency and accountability?
Identify your role in community
engagement: Do you want toengage with communities directlyor through others?
Define the purpose of theengagement: Are you developing
an investment strategy? Do you
want to inform sector or thematicplans? Are you looking for input for
specific investments?
Set the goal for the engagement:
Is the goal to inform, consult, involve,
collaborate and/or empower thecommunity?
Define the scale of the engagement:
What is the extent of yourengagement and how many
stakeholders can you involve?

Identify the expected outcomes
and outputs of the engagement:
What difference will the community
engagement make? What are thespecific insights you are looking to
gain? How will these be captured?
Set the timescales for theengagement: How much time
are you looking to allocate to
the engagement?
Gather information prior to theengagement: What information isalready out there about the place
you are looking to engage? What
have others done before you?
Allocate resources: What is yourbudget and internal capacity? Are
there any additional resources you
might use?
Define how you will measuresuccess: Have you set KPIs? Whichqualitative and/or quantitative
metrics will you use?
Decide who to engage: Are you
engaging all those who will beaffected by the decision? Are
you including hard to reach andunderrepresented communities? Are

you offering financial compensations
for participants? Are there anyaccessibility issues with yourengagement method?
Identify partners: Can you engage
with the community directly?
Would it be more suitable to engage
through community representatives
or community organisations? Can
you get local businesses, authorities,
and universities involved?
Decide on your method ofengagement: Does your method
reflect the specific needs andcircumstances of the engagement?
Are you engaging digitally or inperson? Can you combine methods?
Communicate with communities:
How are you communicating withthe community engaged? Whichchannels are you using? Are you
making your language clear andaccessible? Are you encouraging
two-way dialogue? Are there any
local champions to amplify key
messages? Are you closing feedback
loops appropriately?
Make your engagement sustainable
Have you integrated community
engagement into existing processes
for assessing, monitoring, andmanaging investments?

Communicate externally: Are
you avoiding tokenism and“community-washing” whencommunicating publicly about
your community engagement?
Do community engagement throughothers effectively: Have you madeyour expectations on meaningfulcommunity engagement clear to
those doing community engagement
on your behalf, fund managers,
investees and assets? Are you
monitoring success?
Avoid common pitfalls:
Ask for community input only if adecision has not already been made.
Know what you will do with theoutputs of an engagement process.
Allocate sufficient time or resource
allocated to allow for meaningful
engagement.
Feed back the outcomes of theengagement process to theparticipants.
Do not wait for a crisis to arise before
doing community engagement.
Make sure organisationalarrangements to support community
engagement are in place andappropriate.

52 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

II. Getting support for community engagement
A number of organisations specialisein different forms of community andpublic engagement. For investors who
do not have these skills in-house, suchorganisations can help plan, deliver and/or
evaluate community engagement.
Examples of organisations who canprovide support include:• The Good Economy: The Good
Economy is an impact advisory firmwith expertise in place-based impact
investment approaches, including
a series of ‘PBII Labs” to road test
these approaches and bring together
multiple place-based stakeholders tothe benefit of specific places.
• The Involve Foundation: The UK’s
leading public participation charity.
Since 2003, Involve has worked
with governments, parliaments, civilsociety, academics and the public
to create and deliver new forms of
public participation that revitalise
democracy and improve decisionmaking. Involve has a network oforganisations and freelancers witha range of specialisms from delivery
to evaluation and can put out calls
through its networks for specificareas of support.

• Mapping for Change: Mapping for
Change works with groups andorganisations who want to understand,
improve and produce information
about the places that matter tothem. Mapping for Change offersa range of participatory mapping
services to voluntary and community
groups, business organisations andgovernment bodies.
• Migrant’s Bureau: Migrant’s Bureau isa social design and urbanism practicefocused on engaging with immigrant
and migrant communities. Migrant’s
Bureau focus on interventions
to support engagement with thecommunities to build and design
playgrounds, community spaces
and housing.
• New Citizenship Project: New
Citizenship Project is a strategy andinnovation consultancy that works
with different types of organisations
to create participatory strategies,
cultures and projects that invite
people to step into their power as
citizens. New Citizenship Project use
experience in creative strategy, social
psychology, behavioural theory, design
thinking, academic research, economic
democracy, creative production

and digital practice to craft creativeinterventions that prompt authentic
shifts in how organisations workwith people.
• Plunkett Foundation: Plunkett
Foundation is a national charity
working to create resilient, thriving andinclusive rural communities throughout
the UK. To achieve this, the Foundation
supports people in rural areas to set
up and run a wide range of businesses
which are genuinely owned by local
communities, whereby members
have equal and democratic control.
• Shared Future: Shared Future isa Community Interest Company
based in Northwest England thatworks on community empowerment,
the social economy and democratic
participation. Shared Future planand deliver deliberative andparticipatory processes.
• The Social Investment Consultancy(TSIC): TSIC is a global social impact
consultancy, partnering with its clientsto create an equitable society thatputs impact first. TSIC specialise insocial impact measurement, social
investment and diversity, equity
and inclusion strategies, including
strategies for community engagement.

• Social Value Portal: Social Value
Portal is a B-Corp operating a platformto procure, measure, manage andreport social value as defined in the
National TOMs (Themes, Outcomesand Measures), a widely recognised
framework. Social Value Portal alsooffers dedicated place-based services,focused on helping interested parties
identifying local needs, engage
communities and building a strategy toboost social value creation.
• The Sortition Foundation: The
Sortition Foundation can manage
participant recruitment for community
engagement processes. The Sortition
Foundation offers bespoke selection
and stratification services for investors
looking for a mini public style event.
• TPXimpact: TPX delivers digitaloutcomes that aim to makea difference to how people
experience the world. One of theirservices is planning and delivering
deliberative processes.

54 | Fostering Impact: An investor guide for engaging communities in place-based impact investing

Endnotes
For examples of community engagement outside of
PBII, the Impact Investing Institute’s website provides
a series of case studies on funds reflecting community
voice in different asset classes in private and publicmarkets. See Impact Investing Institute (2023): Justtransition finance case studies.
2Impact Investing Institute (2021): White Paper:
Scaling up institutional investment for placebased impact
3
HM Government (2022): Levelling up the United
Kingdom. The LGPS comprises 99 regional pension
funds, often referred to as “LGPS funds” or “local
authority pension funds”.
4L egal & General (2022): Legal & General announce£4bn investment commitment, working in partnershipwith West Midlands combined authority;5
Schroders Capital: Schroders Capital UK Real Estate
Impact Fund;
6
Igloo Regeneration: Chrysalis Fund, Liverpool;7
Good Governance Institute (2020):
Defining communities;
8International Association of Public Participation(2018): IAP2 Spectrum of Public Participation;
9
This is not to say that activities towards the Inform
goal should be seen as a mere fulfilment of statutory
requirements. Activities to “Inform” should aim toprovide the community with balanced and objective
information to assist with understanding the problem,
alternatives, opportunities, and/or solutions that theinvestor is seeking to address. Engagement towards
this goal should be impartial and where possible should
provide information from different perspectives. See
Involve’s website for further resources and associatedmethods towards the Inform goal.
10People Powered (2022): Impacts of participatory
budgeting: what we know; 11W robel, B. and Massey, M. (2021): Letting Go: How
Philanthropists and Impact Investors Can Do More
Good By Giving Up Control;
12J ust Transition Participatory Budgeting Fund: Funding
for green projects in your community - Aberdeen,
Aberdeenshire & Moray. This fits into the Scottish
Government’s statutory requirement of at least 1%of local budgets being in scope for participatory
1budgeting. See COSLA and Scottish Government(2021): Community Choices: Participatory Budgetingin Scotland Framework for the operation of the 1%
target for Local Authorities (2021 Update)
13A
 lexander, J. (2023): #CouncilCulture: How can
we really shift the relationship between councils
and citizens?;
14
In the UK, a country-wide survey conducted by
Commonplace highlighted that 76% of respondents
thought that ‘people need to be given a greater
say over new developments in their local area. See
Commonplace (2022): Engaging for the Future;
15
U NCTAD-World Bank (2018): Community Engagement
Strategies in RAI Knowledge Into Action Notes;
16
For example, the BlueOrchard InsuResilience Fundaims to help increase the resilience of smallholder
farmers in developing economies to the effects
of climate change by investing in providers of
micro-income protection insurance providers.
Working with 60 Decibels, a tech-powered impact
measurement company, the fund regularly surveys
the end-customers in target areas to ensure thatmicro-insurance products are adapted to their needs
and affordable. See Impact Investing Institute (2023):
Just transition finance case studies.
17
U
 NCTAD-World Bank (2018): Community Engagement
Strategies in RAI Knowledge Into Action Notes.
For broader insights into the benefits of community
engagement (e.g. customer perception and consumer
loyalty, better understanding of consumer market andconsumer preference and better access to employee
talent) see Harvard Business Review (2020): When
Community Becomes Your Competitive Advantage;
Silvia Avasilcai and Gabriela Rusu (2015): Innovation
management based on proactive engagement ofcustomers: A case study on LEGO Group); and Faree
Naz (2022): Role Of Community Partners As An
Integral Element Of The Talent Pipeline);
18
See See Gutterman, A (2019): Community
Engagement and Investment: Supporting Your Client’s
Sustainability Initiatives for an overview;
19
In the corporate social responsibility (CSR) literature,
this concept of acceptance granted to a company ororganisation by the community is often referred to as
the “social licence to operate”.

Financial Times (2023): Greta Thunberg accuses
Norway of ‘green colonialism’ over wind farm;21
See National Social Value Taskforce (2022):
Embedding social value into planning;22Adapted from Walker, P. (2019): DAD and EDD: Twoapproaches to engaging stakeholders in decisions; 23
Tony Blair Institute for Global Change (2023): Building
the Future of Britain: A New Model for NationalInfrastructure Planning;24
S leaford Renewable Energy Plant:
Community benefits;
25
Impact Investing Institute: Just Transition
Finance Challenge;
26
These characteristics were identified based on existing
literature, including National Coalition for Dialogue &Deliberation et al., (2009): Core principles for public
engagement; WWF (2021): Transforming cities
together; Citizens Advice Scotland (2020): Engaging
hearts and minds; Baker, S. (2022): A scoping
review of place-based approaches to community
engagement and support. Welsh Government, GSR
report number 43/2022; Involve: How do I plana participatory process?; Scottish Community
Development Centre (2015/16): National Standards
for Community Engagement. They were further
refined through engagement with PBII investors aswell as Community Cuppas participants.
27
See Public Health Wales: Principles of Community
Engagement for Empowerment for an exploration ofpotential unintended consequences of community
engagement and how to mitigate them.
28See Criterion Institute (2020): Process Metrics that
Analyze Power Dynamics in Investing for a practicalguide on how to approach and measure power
dynamics in an investment context.
29O xfam (2019): The Demand Side of Impact Investing:Elevating the perspectives of local entrepreneurs in
the impact sector;30
UCL: Prosperity in east London
31
S YPA (2023): Consultation, Communications andEngagement Strategy;32
It is good practice to offer the option of vouchers
instead of cash or bank payments, as received
compensation might affect benefits. The option not
20

to accept the payment should also be given. The
compensation rate should be roughly equivalent to thereal living wage per hour.
33
Involve: How do I plan a participatory process?;
34Legal & General (2023): Public consultation launches
for new £1.7bn innovation district ID Manchester
35
Involve: Methods; Participedia:
36N ewham London (2022): Royal Docks Corridor
Community Engagement Report;
37
C ommonplace (2022): Social Media and Community
Engagement in Catford Island;38
See Involve: Where do I start with digital
engagement? for a practical handbook;39See Saxon Court for an example;
40
G lobal Reporting Initiative (2016): GRI 413: Local
Communities; GIIN (2021): IRIS Community
Engagement Strategy (OI2319); Social Value Portal:
National TOMs. For a comprehensive list of community
engagement-related indicators in commonly used
standards and frameworks, see Impact Investing
Institute (2023): Just Transition Criteria.
41See Grosvenor: Creating a more Positive Space Our Community Charter;
42
Schroders Capital: Schroders Capital UK Real Estate
Impact Fund;
43
Shepherd’s Bush Market: The Future;44
G resham House (2023): Sustainable
Investment Report;
45
U jima Boston;46
B arking and Dagenham Giving;47
T he REAL People’s Fund;www.impactinvest.org.uk | 55

Acknowledgements
The development of this guide has
been supported by the Place Coalition,an advisory group that brings together
mainstream investors, social investors,
developers, place practitioners, local
authorities, and partner organisations.
We would like to thank DCMS for theirfunding and support for this project andfor the place-based impact investing
agenda more broadly. We would also
like to extend our thanks to everyone
who attended our “Community Cuppas”- three community engagement events
that were held in the North of Tyne area
(Hexham, Newcastle and North Shields).
We are also grateful to the investors
and other organisations who havesupported the drafting of case studies
on their practices. Particular thanks
goes to Transform Finance, which
has extensively documented leading
practices in community engagement ina PBII context and provided invaluable
materials for our own research.
Thanks also go to the investors,
community engagement experts andother practitioners who have provided
feedback on successive iterations of thisguide, including Bonnie Chiu, Managing
Director - The Social Investment
Consultancy; Dave Thornett, Business
Development Manager - The Key Fund;
Gabriella Peerman, Assistant Portfolio

Manager, Real Estate - Schroders
Capital; Ged Devlin, Development
Manager - The Key Fund; Jonathan
Digges, Chief Investment Officer Octopus Investment; John Alker, Head of
Sustainability - Legal & General Capital;
Leila Sharland, Senior Investment
Manager, Deputy Head, Growing
Enterprises - Resonance; Liam RonanChlond, Head of Engagement - Socius;
Lydia Merry, Manager, Real Estate
Capital - Schroders Capital; Martin Wood,
Senior Researcher - New Economics
Foundation; Matt Smith, CEO - The Key
Fund; Matthew Soffair, Senior Research
Manager, Real Assets - Legal & General
Investment Management; Reema
Patel, Research Director and Head ofDeliberative Engagement - IPSOS; SamMonger, Senior Associate - The Good
Economy; Vasudha Rajain, Associate,
ESG & Climate Finance - Astarte CapitalPartners; William Ixer, Senior Policy
Advisor, Impact Investing – DCMS.

Contributors
Impact Investing InstituteDavid Krivanek, Senior ProgrammeManager; Jamie Broderick, Deputy
Chair and Lead Expert PBII; Julian
Arevalo, Intern; Kieron Boyle, CEO; Lizzy
Robins, Events Manager; Mark Hall, PBII
Programme Manager; Mere Wolfensberger,
Intern; Riah Knowles-Brock, Civil Service
Fast Stream secondee; Roisin Cogan,

Civil Service Fast Stream secondee;
Sarah Teacher, Executive Director;
Steffi Dawoud, Communications andEngagement Manager; Yinka Johnson,
PBII Programme Coordinator.
Involve
Carly Walker-Dawson, Head of Capacity
Building; Hally Ingram, Senior Associate;
Sarah Allan, Director of Capacity Building
and Standards.
Community participants in Hexham,
Newcastle and North Shields.

Design and photography
Toast Design; Joe Haydon Photography.

Feedback
The production of this guide has been an
iterative and collaborative endeavour. We
continue to welcome feedback on theguide and further cases studies of bestpractice of community engagement in thefield of impact investing. Feedback can besubmitted to place@impactinvest.org.uk.

How to cite
Impact Investing Institute (2023):
Fostering Impact: An investor guide forengaging communities in place-based
impact investingwww.impactinvest.org.uk© 2023 Impact Investing Institute. All rights reserved.