This is a very intriguing little story. The UK's Times newspaper reports today that the UK government plans to launch a new 'social stock exchange'. The objective would be to allow social enterprises - such as fair trade brands, housing co-operatives and community ventures - to raise funds. The plan, which is being drawn up with the US non-profit Rockefeller Foundation, also includes the creation of an ethical investment bank that (somewhat controversially perhaps) will draw on around £250m ($500m) lying in 'dormant bank accounts' (i.e. those that have not been touched for many years and whose owners cannot be found). It's an interesting idea, and definitely worth exploring. The question, I guess, is how to take what the dominant form of capitalism does so well - such as putting money behind innovation - and then use that to address some of things it doesn't do so well, like improving equity and protecting common property resources. A 'social stock exchange' may just be the answer - or part of it, anyway... Definitely one to watch.
Sunday, March 23, 2008
Subscribe to:
Post Comments (Atom)
Posts
9 comments:
Potentially excellent!
Great to see something like this start up. (Indeed, one wonders why it hasn't already, or why the web hasn't yet produced an online version of it). Let's hope this new exchange brings social investors and social entrepreneurs together better than before, and that it leads to sustainable funding once all the dormant deposits are exhausted!
Thanks, Diana - yes, I agree with both your concerns / questions. I'm assuming the bank is there to enable social enterprises to take out loans, not grants, which should make it more sustainable perhaps? E
Yes!
I agree with you Diana! Up to this point SRI (Social Responsible Investment) has mainly been the business of global, specialized funds and governments. I really think that a social stock exchange can open up this market for other shareholders, entrepreneurs and smaller businesses, too! Maybe this is also a step in the right direction in dealing with one of the biggest global challenges when it comes to business and social responsibility; making multinationals more "accountable" for their social performance. Non-economic reports, internal guidelines and informal indexes presented to stakeholders by the corporations hardly gives a proper incentive to really make an effort- for investors this can easily become a question of investing in a certain public profile rather than a sustainable project or company.
Hmmm - interesting...
Although - with the current climate - I am not sure anything that bases it's sustainability upon faith in the value of capital is going to be anything other than a short-term solution... but - money will be around for a few years yet - so tweaking existing models to be more socially responsible and encourage *the right kind* of innovation could be a step in the right direction.
Thanks Paul and Elisabet for your thoughts... I agree with both of you that this looks promising, in terms of freeing small businesses and social entrepreneurs to innovate, and perhaps take a few more risks as they won't be so worried about their financial vulnerability.
I also see what you are saying, Paul, about over-reliance on capital, though some form of banking and currency has been around since civilization began, so, as you say, money will be around for a while yet!
I think this is basically about increasing access to financial services that have long been the preserve of big, profit-driven, listed companies. Now the little guys - and those more concerned with social value - get a turn. What will be interesting, though, is if it facilitates access not only to capital but to the kinds of networks that enable other forms of exchange - of ideas, technologies, skills, etc. Creating a 'social FTSE' may enable social entrepreneurs to understand their marketplace better and to forge connections across it. Could be very exciting!
E
I agree E - the really good practical ideas are generally coming from the little guy as you say - plus any kind of self sufficiency plan is going to have to start at home and in the community at large. It reminds me of the recent hoo-haa about drug policy, the people on the front line are the ones that can make a difference, and the biggest positive change comes from the individuals themselves and the most effective support mechanisms come from community projects. Tinkering with the classifications does little to increase the success of dependency/harm reduction campaigns.
Access to funding to enable social enterprises on all levels can only be a good thing - but I guess the point I am trying to make about the reliance on capital is that governments, councils and businesses should all be making sure that these projects don't want for funding or resources to ensure sustainability - although I also know from personal experience that if a little guy doesn't need to worry about putting food on the table or paying the rent by distracting themselves with often pointless and time-consuming 'day jobs' that they would gladly spend their entire lives helping to improve the health of their community and increase the impact of positive action.
Absolutely Paul - I agree with all of this.
There is still a critical role for grant-making to facilitate positive social change. Easier access to loans and investment capital should supplement, not replace, this. I.e. they should not be seen as fungible, otherwise the net effect is zero (well, worse than zero actually, because you run the risk that people that had grants previously now have to repay loans with interest and/or return profits to shareholders instead). It's the combined benefit of grants + loans + investment capital that can ensure the 'little guy' is freed up to innovate (whilst also putting food on the table at home, as you put it).
I also think, echoing your comments, that there is a slight shift towards the 'small is beautiful' philosophy - or at least, towards the community-based change approach. There are so many examples of this, not just in the UK but all over the world. If the weight of popular opinion expressed through the democratic process in Zimbabwe effects positive change, then we'll have yet another great example...
It reminded me of an article I saw yesterday, in the Times, about whether big pharmaceutical companies are really effective innovators - link here
E
More access to funding for social businesses on all levels benefits planet earth and humanity.
We are setting up North America's first social stock exchange connected to a green social network, called the Green Stock Exchange (GREENSX) at: http://greensx.com
The Green Stock Exchange will be launched in the Summer of 2008 to begin trading. It will trade shares in social businesses. A social business is a business that makes a profit, but benefits society as well. We have a triple bottom line (economic + social + environmental).
Since all the listed companies on the exchange are pre-screened, evaluated, and audited according to social and sustainable guidelines set by the exchange, it will make it much easier for green investors to find and support social businesses. The GREENSX provides opportunities for small green Issuers to access public equity capital efficiently, while providing early stage investors, angel investors, and venture capitalists with greater liquidity.
This includes a eBAY.com trading system for carbon credits.
It is still in the beta stage testing. Check it out at: http://greensx.com.
Wow! Thanks David, that's great news. I'll definitely check it out, as I'm sure others commenting on this Reasons to be Hopeful post will do also. Are you linked in any way with those in the UK involved in launching the new social stock exchange there? E
Post a Comment