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Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
Social Investments in a Financial Perspective
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Social Investments in a Financial Perspective

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Discussion around social investments from a financial perspective. Text in Swedish and English.

Discussion around social investments from a financial perspective. Text in Swedish and English.

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  • 1. SOCIALA  INVESTERINGAR  I  ETT  FINANSIELLT  PERSPEKTIV  Social  Investments  in  a  Financial  Perspective  Pontus  Engström   Pär  Löfving  CFO  Mission  Covenant  Church  of  Sweden   DNB  Senior  Analyst  Responsible  Investments  CEO  Derbo  Förvaltning  AB    
  • 2. Vem  investerar?  Who  Invests?  
  • 3.  Anledningar  till  ett  ökat  intresse    Drivers  of  increased  interest  in  social  investments  Examples:   à  Change  from  ”do  —  Human  Rights  incidents   no  harm”  approach  —  Environmental  Disasters   to  ”demonstrate  —  Globalisation   positive  development  —  Technology   benefit”  —  Code  of  conducts,  Regulation  —  Special-­‐interest  groups  and  NGOs  —  Political  initiatives  (EU,  OECD,  UN,  ISO  26000  etc)    Currently:  —  Global  Financial  Crisis    -­‐  short  term  —  Environmental  Crisis  –  mother  of  all  meltdowns  
  • 4. Vad  är  en  social  investering?   What  is  a  social  investment?   —  The  provision  and  use  of  finance  to  generate  social   and  financial  returns.  It  can  take  a  variety  of  forms,   from  the  provision  of  loans  to  direct  equity   investments.   —  Social  return  are  improved  outcomes  for  society.   —  Financial  return  imply  that  there  must  be  some   expectation  on  the  part  of  the  social  investor  that  they   will  be  able  to  get  their  money  back  in  the  future  with   a  return.  Opposite  is  grant-­‐giving.    Financial  Value  =  Price  paid  for  social  value  –  Cost  of  creating  that  social  value  >  0     V  =  PSV  -­‐  CSV  >  0  
  • 5. Andel  sociala  investeringar  under  2010  Share  of  social  investments  made  in  2010   3%   2%   11%   Secured  lending   Unsecured  lending   Quasi  equity   Equity   84%  Source:  Survey  BCG  (2011)  
  • 6. Sociala  investeringar  kan  ske  med  olika  risk  Social  investments  with  different  levels  of  risk   Source:  CAF  Venturesome,  September  2010  
  • 7. Hinder  för  sociala  investeringar  Hinders  of  social  investments  —  Social  purpose  organisations  are  used  to  grants  –   caught  in  the  ”hamster  wheel”.  —  Insuficient  and  fragmented  distribution  of  capital  —  Knowledge  in  social  sector  boards  —  Un-­‐developed  market,  an  emerging  market  —  Regulations  —  Insufficient  incentives  —  Deal-­‐broking  
  • 8. Utveckling  av  en  social  marknad  The  emergence  of  a  social  investment  market   ALTERNATIVE   RISING  STARS   INVESTMENT   ASSET  CLASS   INVESTMENT   READINESS   RESPECTABLE   WILD  WEST   STRANGER   INFORMATION   TO  INVESTORS  
  • 9. Steg  för  ökad  tillväxt  bland  sociala   investeringar   Actions  to  increase  the  growth  in  social  investments  1.  Create  more  ”investible”  business  models                                                     (lack  of  attractive  ventures  to  invest  in)  2.  Improve  financial  skills  and  experience  in  the  sector  3.  Develop  a  better  understanding  of  risk  and  how  to  price  it   (a  better  understanding  of  risk-­‐weighted  returns)  4.  Improve  commisioning  capabilities                                                                   (pricing  outcomes  based  on  the  same  value  of  money)      5.  Improve  metrics  and  independent  audit                                                         (ways  of  measuring  the  impact)  6.  Address  distortive  effects  of  grants  and  ”soft”  finance   (include  the  FULL  costs  of  establishing  and  providing  a  service)   Source:  Adrian  Brown  and  Will  Norman  (2001)  
  • 10. Time  for  Q&A  

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