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Trajectory and Opportunity of Social Finance


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Keynote presentation from the Sustainable Business Conference at the Telfer School of Management at the University of Ottawa on the trajectory and opportunity of social finance, including personal motivations, the economic, social and environmental necessity of social finance, a background on the concept with real life examples, and a vision for the future.

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Trajectory and Opportunity of Social Finance

  1. 1. 3rd Annual Sustainable Business Conference<br />University of Ottawa, Telfer School of Management<br />Social FinanceTrajectory and Opportunity<br />
  2. 2. Summary<br />Motivation<br />Imperative<br />Opportunity<br />Description<br />Vision<br />
  3. 3. Motivation<br />
  4. 4. Adam<br />
  5. 5. Ravenscraig Mill, Glasgow<br />
  6. 6. Hamilton, Ontario<br />
  7. 7. My Career<br />
  8. 8. Imperative<br />
  9. 9. We are faced with seemingly intractable social and environmental problems at a global and local level.<br />
  10. 10. Our Challenges:<br />1. Poverty<br />2. Climate change<br />3. Government debt<br />4. Economic transition<br />
  11. 11. Sandy Lake First Nation 2008<br />
  12. 12. Kenya 2009<br />
  13. 13. Ottawa 2009<br />
  14. 14. Windsor 2010<br />
  15. 15. The Cost:<br />Billions & trillions <br />of dollars.<br />Hundreds of thousands <br />of lives.<br />
  16. 16. We have a fundamental responsibility to act. We need to change the way we live and the way we do business.<br />
  17. 17. Opportunity<br />
  18. 18. An agenda driven by:<br />Consumers<br />Thought Leaders<br />Political Leaders<br />Corporations and Foundations<br />Ventures<br />
  19. 19. Professor Michael Porter<br />Bishop William Lawrence <br />University Professor <br />at Harvard Business School<br />
  20. 20. “<br />In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community...The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges…The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy.<br />
  21. 21. The concept of shared value recognizes that societal needs, not just conventional economic needs, define markets. It also recognizes that social harms or weaknesses frequently create internal costs for firms—such as wasted energy or raw materials, costly accidents, and the need for remedial training to compensate for inadequacies in education. And addressing societal harms and constraints does not necessarily raise costs for firms, because they can innovate through using new technologies, operating methods, and management approaches—and as a result, increase their productivity and expand their markets.<br />”<br />
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  25. 25. What is Social Finance?<br />
  26. 26. socialfinance<br />[soh-shuhlfi-nans, fahy-nans], n.; synonym: impact investing<br />Social finance is an approach to solve social or environmental challenges while generating financial return.This includes investments that range from producing a return of principal capital to offering market-rate or even market-beating financial returns. Social finance encourages positive social or environmental solutions at a scale that neither purely philanthropic supports nor traditional investment can reach.<br />
  27. 27. Investor Profile<br />
  28. 28. Venture Profile<br />
  29. 29. The Market<br />Local: $2 billion<br />Global: $50 billion<br />
  30. 30. Toronto Community Housing Corporation (TCHC) Bond:<br />$1B Regent Park Revitalization with $450M Bond<br />
  31. 31. Rowe Farms: ~$4 million in debt and equity investments to grow/expand retail operations via Investeco. <br />
  32. 32. Planet Bean Coffee: $75k loan as a part of a $250k debt capital raise for expansion of retail operations via CAIC. <br />
  33. 33. Centre for Social Innovation (CSI): $1.8M bond issue for the acquisition and re-development of new facility.<br />
  34. 34. Wood Street Urban Farm: $250k loan through Chicago Community Loan Fund for facility construction through Calvert Community Investment Note.<br />
  35. 35. Serviam Gardens: $3.6 million loan an 83-unit complex for low-income seniors in the Bronx via NYC Acquisition Fund.<br />
  36. 36. Finestrella: $4 mil equity investment in regional mobile phone company focused on low-income customers through Ignia, LP.<br />
  37. 37. KenGen: $200M bond to finance construction of 500 MW of geothermal power generation in Kenya.<br />
  38. 38.
  39. 39. Profits<br />Planet<br />People<br />
  40. 40. A Vision for Social Finance<br />
  41. 41. Seven Key Recommendations<br />Foundations<br />National Impact Fund<br />Bonds<br />Pension Funds<br />Modernize Corporate Forms<br />Tax Regulations<br />Support Services<br />
  42. 42. Market Potential<br />Local: $30B<br />HNWIs: $120B<br />Global: $40B - $1T<br />
  43. 43. SEARCH FOR SCREENED FUNDS & VENTURES<br />CREATE & MANAGE INVESTOR PROFILE<br />Accredited <br />Investors<br />Service<br />Providers<br />CREATE & MANAGE PROVIDER PROFILE<br />SVX<br />Lawyers, auditors, analysts, alternative banks and credit unions, and investment banks <br />Foundations, Endowments, Wealth Managers, High Net Worth Individuals (HNWIs), Asset Managers<br />SHARE DUE DILIGENCE & PRESENT COLLABORATIVE DEALS<br />OBTAIN FINANCIAL TRAINING & RESOURCES <br />ONLINE<br />Venture Listings<br />Fund Listings<br />Investor Listings<br />Financial Service Provider Listing<br />Resource Centre<br />Collaboration Tool<br />SEARCH FOR SCREENED VENTURES<br />Social <br />Ventures<br />Impact <br />Funds<br />SEARCH FOR FINANCIAL SERVICE PROVIDERS & INVESTORS<br />CREATE & MANAGE FUND PROFILE<br />Local impact investing funds<br />Nonprofits, cooperatives, social purpose businesses<br />CREATE & MANAGE VENTURE PROFILE<br />Impact-First I Innovative I Trusted Connector I Market Consolidator Public Service I Non-profit I Access Point<br />
  44. 44. Local & Global Markets<br />
  45. 45. Our goal is real incremental and transformative change.A transition to a socially and environmentally just economy.<br />
  46. 46. 3rd Annual Sustainable Business Conference<br />University of Ottawa, Telfer School of Management<br />Thank You<br />