By Bonnie Chiu, Managing Director, The Social Investment Consultancy
Mergers and acquisitions (M&A) are rarely discussed as a route to systems change. In the social impact sector, they are more often seen as a response to financial pressure, or simply as a way to grow. Two years ago, TSIC brought The Social Innovation Partnership (TSIP) and Renaisi into the group, and earlier this year we formed a strategic partnership with Rimm Sustainability. These moves have pushed us to ask a harder question: how can we use them to contribute to systems change?
The honest answer is that we did not begin with a fully formed vision. But two years of exploration and learning have brought it into focus. What we want to build is not a bigger firm for its own sake, but a piece of shared infrastructure that supports systems change.
The missing connective layer
That thinking took shape most clearly at the Sustainable Finance Initiative (SFI) Impact Summit in Hong Kong earlier this year, where I wrote alongside Ravi Chidambaram of Rimm Sustainability about what is preventing impact from scaling across Asia. The recurring question at the summit was how to move from isolated success stories to impact at meaningful scale. We came at it from different vantage points, Rimm from sustainability technology and TSIC from catalytic capital, but reached a similar conclusion. The constraint is not a shortage of capital, technology or ambition, because all three already exist at scale. What is missing is the connective layer between them, meaning the incentives that make adoption rational, the structures that move money towards risk, and the conviction to fund systems rather than symptoms
Blended finance is one example of what that connective layer looks like in practice. It is still too often treated as a niche instrument for large infrastructure deals, when it is a way of structuring capital that works wherever strong social or environmental outcomes sit alongside weak standalone financial returns. When philanthropic capital takes a catalytic position, absorbing first loss or accepting concessionary terms, it can unlock much larger pools of commercial capital behind it. The structures already exist, and what holds them back is that too few organisations understand them well enough to use them deliberately.
The same diagnosis applies to civil society infrastructure closer to home. The sector is not short of expertise, evidence or commitment. What it lacks is the connective tissue that would allow those things to travel between organisations, places and sectors, so that a method developed in one context can strengthen work in another rather than staying locked inside a single team.
Connective, not consolidated
Building those connections, between different forms of capital, technology and expertise, and between organisations and places, is the role we want to play.
Our strategic partnership with Rimm is one way we are doing this, bringing their sustainability technology, environmental, social and governance (ESG) data intelligence and impact measurement capability together with our own work on impact strategy, social investment and blended finance. Renaisi Innovation does the same closer to home, linking policy, funding and grassroots expertise with deep place-based relationships.
The partnership also reflects a lesson from our own consulting work. Strategy and evaluation projects often produce strong frameworks, but once a project closes, clients may lack the systems or workflows to keep using them, and the report goes unused. Data platforms face the opposite problem, with plenty of dashboards but too little guidance on what to do with them. We have written more about this gap [link to DIKW blog]. Bridging it means leaving something lasting behind, which is part of what we mean by infrastructure.
Being part of the same organisational structure also changes the incentives. In a looser arrangement, organisations working in the same field can end up competing for the same clients and funding, even when they share a mission. Within one group, that pressure eases. We are not trying to win work from each other. Instead, we can see where our skills and expertise complement one another, and how each of us contributes to a shared infrastructure. That alignment, more than size, is what makes M&A a pathway to systems change.
What we want the group to be, then, is connective rather than consolidated. The value we are trying to create sits in the relationships between organisations, and in the ability to move insight and capital between them. We want it to remain plural by design, holding distinct identities, brands and theories of change, because that plurality is an asset rather than an inefficiency to be tidied away. And we want it to be built to hold rather than only to grow, because durability rather than size is what makes infrastructure useful when the sector is under strain.
The work ahead
None of this is guaranteed by good intentions. An acquisition creates a power imbalance, and we still hold the ownership. What we can do is stop that imbalance from shaping how the group behaves, by being clear about where decisions sit, by resourcing participation properly, and by focusing on the strength of our relationships, not only on what we deliver in any given year.
Two years in, this is the work that feels most worth doing. The technology, the capital and the expertise largely exist. What remains underbuilt is everything between them, and that connective layer is what we are setting out to help build. We will keep sharing what we learn as we go, and we would be glad to hear from others who are building in the same direction.