The Group has committed to tackling the UK’s poverty premium by investing in the Fair by Design (FBD) Fund – an organisation which helps to grow businesses that make markets fairer.
Group charity, Places Foundation, has committed £250,000 to FBD, which is managed by Ascension Ventures and aims to address the poverty premium in the UK by backing social tech ventures.
The poverty premium is the extra costs that people on low incomes pay for essential products and services; it is estimated that such costs burden the average low-income household by an extra £490 a year for services including energy, white goods, insurance and credit.
The funding is the Group's latest social and charitable initiative, which last year delivered over £280m of social value through social value activities.
Marcus Hulme, Director of Places Impact, said: “We are proud to be a part of this movement which aims to address the poverty premium in the UK.
“As an organisation we’re determined to do all that we can to help customers and communities by tackling the grossly unfair poverty premium. There’s such an imbalance when it comes to access to finance and services for some people due to their credit status or financial situation which results in them paying a disproportionate levy on day-to-day services. I’m proud that we’re using our charitable resources to help tackle that.”
FDB launched in 2018 with initial investment of £10 million from investors including Big Society Capital and the Joseph Rowntree Foundation. It invests in both pre-seed and seed stage social tech ventures which have a clear social purpose and route to market.
Initial investments range from £75,000 to £400,000 with follow on rounds in companies which have high potential to scale. To date, FBD has deployed £6.6 million in 12 social tech ventures.
Other investors in this round include the Nationwide Building Society, Edinburgh University and Esmée Fairbairn, whilst prior funding rounds have attracted investors including Comic Relief and Big Society Capital.
Jean de Fougerolles, CEO of Ascension Ventures, concluded: “Ascension has been managing the Fair by Design Fund for the past three years, investing in tech-for-good businesses that reduce key aspects of the poverty premium.
“The support of our new investors allows us to scale our work with a leading mission-led organisation to tackle the challenges faced by people impacted by the poverty premium across the UK. Together, we can change lives and back formidable entrepreneurs to scale market-led solutions to correct incredibly unjust market failures.”