UK’s Social Stock Exchange is planning to list international companies

Future World Giving

David Cameron at the G8 Social Impact Investment Forum. Image from The Prime Minister’s Office via Flikr

The UK’s Social Stock Exchange (SSE), an online portal seeking to link investors with companies that are making a positive social impact, is planning to expand its membership to international companies.

 

By listing companies that, whilst seeking to turn a profit, also have “social and environmental aims at the core of their activities”, SSE aims to appeal to people who want their investments to have a positive impact on society and the environment. It is hoped that the Social Stock Exchange will facilitate a continued growth in social investment which, according to a survey by JP Morgan is projected to have grown from $8 billion in 2012 to $9 billion this year.

 

The move to internationalise SSE has come following the support of UK Prime Minister David Cameron who expressed his desire for London to  “cement its place as the home for social finance” at SSE’s launch, just before of this year’s G8 Summit. Pradeep Jethi, chief executive of the SSE is quoted in a recent Financial Times article saying “we are looking at companies listed on Nasdaq OMX, NYSE Euronext and Deutsche Börse.”

 

Companies that would like to join the 11 current members in being listed on the SSE portal must apply for membership with applications reviewed by an independent admissions panel made up of ” finance and social sector experts”. In addition, prospective members are expected to produce an impact report detailing:

 

  1. The social or environmental  purpose of the company and the impact it will deliver
  2. Who benefits as a result of the company’s social impact
  3. How a company’s products, services, and operations deliver that social impact
  4. How a company involves and consults with all its stakeholders
  5. What evidence a company has of its social impact and how that is collected, measured and reported

 

SSE is a welcome venture in the nascent social investment market and will help to both raise the profile of and establish standards in ethical investing. However, as pointed out in a recent Guardian blog, the requirement for companies to be listed on the stock exchange rules out “almost every social enterprise in existence”. Nevertheless, SSE represents a useful addition to the social investment landscape and its expansion to include companies listed on foreign stock exchanges is an interesting and potentially significant development.

 

Adam Pickering

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