On Wednesday this week the Social Stock Exchange is holding its annual investor conference. If the number of registrations for this event is any guide, we can confidently predict it’s going to be a rip-roaring success – over 100 individuals will arrive at the Dutch Hall in the City of London to listen to and engage with some of the leading figures in the impact investment world.
With 48 members of the Social Stock Exchange to date – and more lined up to go through the exchange’s Admissions Panel – this conference, at its heart, is a further indication that impact investment has shifted from an interesting but esoteric field into the investment mainstream.
In just four years – from the establishment of Big Society Capital in 2012 and the launch of the Social Stock Exchange in 2013 – the impact investment field in the UK has utterly transformed. The latest policy nugget was the Charities (Protection & Social Investment Act) of 2016, which removed a significant barrier to charitable funds being deployed into social impact investments.
At this week’s conference two panels will discuss how to convert good intentions into a realistic investment strategy, and consider some case studies of successful impact investments, to see what lessons can be generated for others.
Let’s take a brief look at some hard data concerning what the Exchange has achieved since it started.
These figures – just a small sample – are all about the direct impact of member companies. There have been more than 340,000 houses provided for primary care services, with more than 150,000 affordable homes, and more than 7,000 people now receiving care and support services. More than 40,000 homes are today powered by renewable energy, with a 37% reduction in household spending on energy. 75% of new developments by Exchange members have been on brownfield sites, with more than15 million tonnes of CO2saved annually.
In a context of continued low female representation at board level, and the staggering gap between executive and average pay, Social Stock Exchange member companies are justifiably proud of their efforts to rebalance boards and boost female employment. Between 37% and 50% of Social Stock Exchange members have women on their boards, and 28% in senior managerial roles, while 50% of employees are women.
Part of the 2016 success of the Social Stock Exchange is its forays into the UK’s regions. A century ago Britain had 22 local stock exchanges which, as capital-raising increasingly gravitated to London, gradually amalgamated and closed up shop. This monolithic model is no longer fit for purpose today and has arguably been damaging – both socially and economically – for both the regions and London. The Social Stock Exchange has thus been at the forefront of championing social stock exchanges outside of London to facilitate local equity ownership and building support for local companies that vitally need capital to boost their own growth and also to deepen local beneficial impact.
At the start of 2017 The Economist spelt out the likely trajectory for the immediate future of impact investing: “the entry of hard-nosed financial giants sends an important message about impact investing: that they see it as profitable for themselves and their clients. It is not enough to make investors feel good about themselves; they also want to make money.”
Thus, although the investor conference will be a must this week, it’s also important to note that the Social Stock Exchange is not just sitting on its laurels. 2017 sees a range of development plans, including: the development of its position as the thought leader of the impact investment movement; the establishment of partnerships with international exchanges; the building of its brand; and the streamlining of operations, to name but a few.
Impact investment was once just a burbling brook; it’s now a flowing river; in five years it will be a torrent. Mark my words.
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