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

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