New Finance, New Business

Speakers:

 

Marcello PalazziCo-founder, B Lab Europe

Karl RichterCEO and co-founder, Engaged Investment

Daniel MiodovnikAssociate in Social Impact Bonds at Social Finance

 

 

Description:

 

With social value becoming increasingly recognised in the global market, new institutions and organisations are emerging to bring social value up to a similar level of institutional engagement to financial value.

To understand more about this drive towards new finance and new business, three speakers from investment and financial backgrounds will be speaking about how their organisations are leading the way.

Blogs:

 

Karl Richter  The Fancy Names Aren’t Helping

PowerPoint Presentations:

Karl Richter : EngagedX

Session summary:

 

1. Why are organisations not taking enough account of social value?

One problem particularly related to investment is the challenge of scalability and supply and demand. Without funding for social programmes, it is incredibly difficult to grow without initial social capital.

A second challenge that was mentioned was a lack of information on 2 different fronts; firstly a lack of information about social investment opportunities, hence resulting in a delay in money getting to the frontline and, related to this, not enough investor readiness to act as a matchmaker. Secondly, a deficiency of knowledge and information storage about social impact. Most organisations and businesses don’t have good enough information for banks, never mind social value information and data collection. Whilst this communication deficit within companies is a difficulty, communication between sectors is also a challenge. The public sector has been fairly slow to change and adapt to how investment changes can be useful to them. There was also a failure to properly understand the relationship between financial risk and return – there is potentially too much emphasis on this within the sector.

Finally, the languages spoken by the government, delivery, and investors are currently very different. Tools and programs always require interpretation for the different sectors to interact.

 

2. What’s the solution?

Solutions to the above challenges included increasing frequency and quantity of data collection (by making this easier, producing tools, embedding methods in organisations) and increasing awareness of the necessity of this for the success of social investments.

Another solution was to improve the money/investment flow; these need to be longer term, quicker to act and more mainstream. Maybe new products can be created for retail banks to offer their clients?

 

3. What’s your organisation doing?

All three speakers demonstrated energy and innovation in how their organisations were coming up with ideas to combat these challenges. Social impact bonds have been designed to link up money captured by the frustration felt by people who need something creative to deal with social problems in the world. This money, via social impact bonds, then goes to organisations in need of capital. Social bonds can also enable data sets to be collected for governments to be able to examine the effectiveness of different interventions.

EngagedX has been developed to fill the social investment data gap by providing social performance and financial data as a channel to mainstream capital markets.

B Lab supports GIIRS Ratings and Analytics, which assesses the social and environmental impact of companies and funds. It is a comparable third party system which will enable funds to increase scalability.

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