Cliff Prior
Cliff Prior is the CEO of the Global Steering Group for Impact Investing – the independent organization driving a rising global movement toward impact investing in favor of all people and the environment. Cliff was previously CEO of Big Society Capital, the wholesale market developer and investor in social impact in the UK, of UnLtd, the British foundation for social entrepreneurs; of Rethink for people affected by severe mental ill health. He has also worked in social housing, healthcare, elder care, and homelessness. Cliff has co-founded social companies and served as a government adviser and regulator in a number of social issue areas.
What we learnt
Cliff Prior shared his journey in the impact space and his views on the concept of "impacts." Cliff started his career in various fields, including biochemistry, crisis intervention, social housing, and social entrepreneurship, before becoming the CEO of Big Society Capital, the social investment agency for the UK.
When asked about what "impacts" means to him, Cliff had initially focused on “social investing” rather than the broader field of impact investing. However, he notes that the term has evolved to encompass both positive and negative effects of actions or interactions, regardless of their nature.
Cliff discussed the need to properly account for negative externalities and the evolving standards in the impact space. He emphasized the significance of understanding the costs of inaction, citing examples such as carbon emissions and the environmental impact of mining. He stressed the importance of considering the broader scope of impact, including the effects along the value chain.
Transition impact was another key topic discussed in the interview. Cliff explained that certain projects require unpleasant actions in the short term to achieve positive outcomes. He referred to the Just Energy Transition Programs (JETPs) as an example, focusing on the transition from coal to clean energy in countries like South Africa, Indonesia, Vietnam, and West Africa. These programs incorporate climate, socio-economic, and community perspectives, emphasizing the importance of community voice and multi-stakeholder collaboration.
Cliff shared an example of successful collaboration through Fair By Design, a poverty alleviation program that addresses the poverty premium in the UK. The program brought together investors, political engagement, communications research, and other forms of support to tackle higher prices faced by people on low incomes. This solution-based approach, considering multiple stakeholders and their contributions, has been effective in driving impact. Another noteworthy example mentioned was zinc.vc.
Cliff emphasized the significance of considering government policies and public support in such initiatives. He explained that involving various stakeholders, including investors, policymakers, researchers, and communications experts, can increase the effectiveness and visibility of projects. He also mentioned the importance of scalability and contextualization in localized projects, acknowledging that different countries and regions require tailored approaches. Cliff believes that engaging with local communities, understanding their circumstances and values, is crucial for successful implementation.
The conversation further explored the challenges of scalability, particularly in cases where projects may disrupt local populations. Cliff provided examples of environmental projects where balancing the benefits and potential harm to communities is a complex issue. He mentioned the importance of transitioning from activities that cause harm, such as overfishing, to activities that bring both climate and social benefits, like wind energy. However, he acknowledged that certain areas may face significant challenges and population displacement due to climate change, necessitating technological interventions.
Regarding technological interventions, Cliff noted that certain areas like energy, mobility, circularity, and carbon accounting tend to garner more attention, whereas other crucial sectors including food and agriculture, buildings, manufacturing, and greenhouse gas removal often receive insufficient focus, despite their substantial impact on climate change. He emphasized the urgency of prioritizing high-value moonshot concepts like nuclear fusion, while also acknowledging the importance of exploring new technologies that can facilitate a widespread shift toward a low-carbon economy by 2030.
If you had a magic wand…
If I had a magic wand to get people to accept the changes required due to climate change, my magic wand would be snapped out of my hands and broken into tiny pieces. So, I'm going to go for technology. I think back to the NASA moon shot, billions, probably trillions in current value terms, were put into that and it was successful. We now need quite a range of different new technologies and digital advancements. Can we use similar approaches of having these large-scale testbed funds as VC on a massive scale? In VC, if you invest in 10 companies, you expect to be lucky if you've got one unicorn, two or three. The rest have failed. We need that kind of VC energy but at a much bigger scale and with rapid deployment into mass use. It's notable that it took 20 years for solar panels to become cheap. So that's my magic wand.
Key quotes
“Transition impact is becoming more important. For example, if you want to put social homes on brownfield land, you will need to dig up some nasty stuff in the first year, which is negative impact. However, once you have cleared the land, you can have a positive impact. Therefore, you need to consider the transition element. Transitions are important in the areas you are discussing.”
‘Impact refers to the positive and negative effects of actions or inactions, regardless of how they are taken.’
‘If you start reducing your carbon emissions this year, it will be a much bigger deal than if you wait until next year. Inaction has an impact.’
"Don't just think of yourself as an investor. Think of the solution. What is required to solve this particular problem?’
‘Big Society Capital now does this kind of thing regularly, trying to understand who they need to work with to achieve their goals. They ask themselves if investment is useful for this, and if it is, what kind of investment and what other parties are needed.’
‘if you try to do major environmental work, which almost at some point is going to create harm for people, changing jobs, changing homes, etc., you need to attune it to the circumstances and mores of a country. Without that, you're not going to get climate measures through.’
‘For instance, if there has been overfishing in your local coastal areas, people may be losing their livelihoods as fishermen. If you put wind turbines in, the same skills are required because you need to maintain them. You need people who are good at bookkeeping, captains, and an industry to support and repair the boats. This switch from climate harm to climate and social benefits can be a win-win situation.’