New forms of financing future societal challenges

On Friday December 12, Swedish Entrepreneurship Forum and Forum for Social Innovation Sweden arranged a lunch seminar on new forms of financing social innovation. The audience listened to presentations and discussions on Social Impact Investment – a form of socially responsible investments. 

Johanna-Palmberg
Johanna Palmberg

Social Impact Investment

Johanna Palmberg, Ph.D. and Research Director at Swedish Entrepreneurship Forum, opened the seminar by presenting Philanthropy Forum and Swedish Entrepreneurship Forum. Then she invited Camilla Backstrom, Senior Advisor at the Forum for Social Innovation Sweden, on stage. Backstrom started off with a presentation of what Social Impact Investing means and how this form of financing relates to other forms of social finance as philanthropy and sustainable investments. Impact investment is a form of investment that aims to generate measurable social impact, combined with financial return.

– We need to broaden the knowledge of impact investment in Sweden.

 Cammilla-Backström
Camilla Backstrom

An international perspective

Backstrom has written a report to increase the awareness in Sweden of the international development of Impact Investment. The report provides an overview of how countries like France, Britain, Canada and the United States are working with various forms of financing for future societal challenges. It requires that decision makers at state level, as well as at regional and municipal levels, clearly prioritize and promote social innovation. For better results it demands cross-border cooperation between different actors in society as well as an open dialogue and the introduction of a national framework for measurement and evaluation.

Gulhem-Dupuy
Guilhem Dupuy

Social Impact Investment Taskforce

Guilhem Dupuy, CEO Advisor Ecofi Investissements ­ Groupe Credit Cooperatif, was invited to talk about France’s work with the Social Impact Investment Taskforce, which was initiated in 2013 by the British Prime Minister, David Cameron, and the World Economic Forum together with the G8 countries. The group launched a final report earlier this fall with the aim to raise awareness about new forms of financing for future societal challenges and to build a global consensus on issues related to efficiency evalutation.

– Different countries have found different solutions.

Dupuy said that Impact Investment is not an alternative to government spending, it does not deprive the government’s responsibility for welfare, but it can help to meet the objectives more effectively. Furthermore, it is clear that the market share of Impact Investing is strongly correlated with the effectiveness of a country’s welfare system.

– All countries have social problems. It is therefore important to have a venue for discussion and debate.

Mapping of ecosystems

The arena – National Advisory Board – that France has created for Impact Investing performs a survey of the French ecosystem in order to make financial resources and existing financial instruments available for investment and to identify sectors and organizations in need of financial resources.

– It’s all about coming to a sort of consensus on how these investments should be carried out nationally.

According Dupuy the types of organizations that are best suited for Impact Investing is partly welfare organizations, ordinary companies and also profit-with-purpose companies and organizations. He also mentioned two ways to go; the long way and the proxy way. The long way demands an agreement on a definition of social enterprise and then the data is collected. The proxy way examines which organizations have data available and thereafter the sectors that are suitable to invest in.

Caroline-Cederlöf
Caroline Cederlöf

Sweden not there yet

Caroline Cederlöf, Co-Founder of Social Initiative, highlighted that Swedish experiences concerning impact investment are few since the concept is new in the country. However, she has seen a trend of increased awareness of the concept since Social Initiative was founded twelve years ago.

– Back then many corporate CEOs said impact investment was a decent idea which would not work in practice.

The concept of social entrepreneurship was misunderstood as well. Social and entrepreneurship was seen as antonyms which could not be combined, Cederlöf said.

– Nowadays corporations have changed their mindset, it is no longer enough to give the company Christmas present for a good cause, you need a holistic view.

Nowadays many companies have increased focus on social issues throughout the chain, from production to distribution and consumption. Nevertheless, Swedish companies have room for improvements, Cederlöf said in conclusion.

Janine-Alm-Ericson
Janine Alm Ericson

New ways to solve society’s problems are welcomed

Janine Alm Ericson, Economic Policy Spokesperson (The Swedish Green Party) and Member of the Parliamentary Finance Committee, told that the Green Party is aware that there are social problems that can not always be solved within the framework of old structures. Our party has developed from this approach, Alm Ericson said.

– We must find new ways to solve society’s toughest problems. They are obvious not only in the environmental arena but also on the social side.

Alm Ericson welcomed all solutions to work with these issues in a better way.

– There are good ideas in the government’s budget –  even though it fell – they can be used to strengthen the third sector and deal with social problems.

She also referred to that social impact investment have just begun to be discussed in Sweden. We discuss how we can use money from the pension funds in order that they better support the community while providing dividends in future pensions, Alm Ericson continued. She also highlighted the fact that some municipalities with good results use social investments to prevent crime. Banks’ social investments have also been strengthened, for example Nordea reports the environmental impact of their funds, but in this area there is much left to do, Alm Ericson said.

Erik-Ullenhag
Erik Ullenhag

Make it easier to combine private, public and civil society!

Erik Ullenhag, Group Leader in the Parliament (The Liberal Party) and Member of the Parliamentary Finance Committee, began by highlighting an example where he himself has been engaged in a homework assistance effort in Uppsala. He related this to the problem of combining volunteering with private and public sectors.

– There is a huge challenge to combine these three, who look upon each other in suspicion. In Uppsala teachers were skeptical; who wanted to help with homework and why?

It needs to be clarified what the welfare sector’s tasks are and what civil society should do. They can never replace each other, Ullenhag said.

– Since the budget fell, tax deduction for gifts remains. It sends a signal that this is a good thing to get involved in.

 Panel1
Panel discussion

Nuance the debate

The discussion on profits in the welfare sector and the experience that companies making money are mean, makes it more difficult to combine the three sectors of private, public and civil society, Erik Ullenhag ended and welcomed a more nuanced discussion.

Guilhem Dupuy said that it’s the same situation in France. Profits in the welfare sector are not accepted. The three sectors have come a bit further in their interaction though, for example in terms of social services.

Alm Ericson also considered that the profit debate needs to be more balanced and that there is a need for a new environment for non-profit organizations to grow.

panel2
Panel discussion

The work continues

Finally Dupuy said that a new permanent steering committee is currently being developed under the Social Impact Investment Taskforce. This time it offers more countries to join as members. Sweden has thus a chance to participate.

 

Movie about Social Impact Investing >

Link to the Social Impact Investment Taskforce >

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