Are social stock exchanges the great equalizer of development finance?

Monday, July 15, 2013

This past June, the world was introduced to two social stock exchanges.

In London immediately ahead of the G-8 Summit, U.K. Prime Minister David Cameron announced the launching of the Social Stock Exchange designed to connect social impact businesses with investors looking to generate positive social or environmental change and return on their investment. Supported by the London Stock Exchange Group, the SSE already has 11 listed member companies.

“For years the London Stock Exchange has made London the home for private finance, today London can cement its place as the home for social finance too,” Cameron declared in his pre-summit remarks.

Around the same time, Impact Investment Exchange Asia or IIX announced its public trading platform for social enterprises, called Impact Exchange, which has been formed in partnership with the Stock Exchange of Mauritius.

The relationship with the Stock Exchange of Mauritius is strategic, according to IIX sources, and allows the exchange to expand its footprint into both Africa and Asia. The groups are anticipating the first issuance on Impact Exchange within the year.

Despite multiple launch postponements — and the difficulties of shifting the mindset of investors beyond profit alone — impact investing leaders said they believe these social stock exchanges are poised to both democratize development finance and make inclusive growth a reality in emerging economies.

Source: Devex (link opens in a new window)

Base of the Pyramid, impact investing, social enterprise