Social impact investing and its role in the future social public/private investments,
Continuing dialogue
Conference in EESC in Brussels,
16 February 2015 9h-13h.
Impact investing is pushed forward as an emerging conceptual framework, a new way of tackling
social questions in a new financial environment: new financial market players will meet the financing
needs of social players and help indebted states and weakened banks to finance social enterprises.
The impact of ‘impact investing’ approach on social enterprises and social services of general interest
deserves all our attention.
Social enterprises, by definition, view profit making as a secondary objective. They often manage
social services of general interest which need public funding and not only private. Due to their low
profit margin, they are generally unable either to deliver any capital gain to their investors or to
redeem their original investment; when their investors withdraw, they must be replaced by others.
The new wave of impact investors claims1 that, for scaling up, social enterprises can progress by
defining social impact objectives in accordance with ‘impact investors’. New methods, like “Social
Return On Investment” (SROI), are promoted so that organisations should define their social impacts
in detail, then measure them in monetary value, so that an expense can be linked to social gains
expressed in monetary terms. When measured, impact investing in « social risk », being a cost
compared to a “normal” return, may be refunded by public resources or philanthropy.
As a result, the social investments made by these ‘impact investors” would finance social enterprises
to realise these objectives in a time when public funding become rarer. The sum of these impacts
would be beneficial for society. The largest investment banks see “Impact Investing” as a new way of
investing and social organisations as a new class of assets (Alix & Baudet, 20132). Philanthropists and
savers who want to “make their money meaningful” could give or invest money where it will be most
socially profitable.
States are seeking to attract such funds and make social investment attractive at this time of highly
constrained budgets. It is also argued that measuring the “social impact” of organisations is
important for planning public action. The Social Investment Package3 (SIP) aims at reorienting
Member States' policies towards social investment where needed. "Support must offer individuals an
exit strategy, be granted for as long as needed, and so in principle be temporary in nature", "with a
1
Revolutionising Philanthropy: Impact Investment, Sir Ronald Cohen, Chair of the Social Impact Investment Taskforce
established by the G8, The Mansion House, Thursday 23 January 2014
2
Alix N. & Baudet A., 2013, « Impact investing: a factor of transformation of the social sector in Europe »,
CIRIEC Working papers n°2014/15
3
"Towards Social Investment for Growth and Cohesion – including implementing the European Social Fund 2014-2020",
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC
AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS, Brussels, 20.2.2013 COM(2013) 83 final
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view to ensuring the adequacy and sustainability of social system”. The Commission calls on Member
States to pursue the actions in strengthening social investment and making the best use of EU funds
to support it, notably the ESF.
As the Social Business Initiative (SBI) has identified access to suitable finance as one of the main
challenges for social enterprises, the European Union also wants to draw on social impact investing
to govern financing for social enterprises. As a result there is an emerging interest in the area of
creating a social investment market. The GECES has adopted a report in June 2014 to promote a
common European framework for the measurement of those impacts4 and discussed in its 18
November meeting about its implementation.
In the meanwhile, “impact investing” has been put on the G7 agenda5. The aim is to create an
international support community, better understand market potential and move towards
“transparency and standardisation in impact measurement”. The G7 working groups, both
international and national6, have published their reports with key findings and recommendations on
the 15th of September. Impact investment “the invisible heart of the markets” can “harness the
power of entrepreneurship, innovation and capital for public good” 7.
EESC opinion on social impact investment8 proposes to adopt a cross-sectorial resources approach
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under both SIP and SBI, and public responsibility perspectives. Rome Strategy underlines that social
impact measurement remains a “non-consensual issue” which needs further dialogue.
No doubt that the type of financial players and financial tools they use have a great influence on the
targets. Both are linked, this is why social measurement methods are crucial for social enterprises
and social economy. The public authorities’ responsibility is engaged as regards this potential new
markets and, far beyond, as regards the relevance of new economic metrics in their social public
decisions.
As impact investment is ongoing, the conference will focus on leading questions, under the
perspective not only of investors but of associations, enterprises and clients and citizens as well:
1 – why and where is impact investment useful and possible, why and where not?
2 – why and where is impact measurement useful and possible, why and where not?
The conference is aimed at :
- members of civil society organisations, in order to share information and questions
- representatives of the European institutions, in order to continue the dialogue and
determine further steps.
4
Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European
Social Entrepreneurship Funds. “As the principal objective of social undertakings is to have a positive social
impact rather than to maximise profits this Regulation should only promote support for qualifying portfolio
undertakings that have the achievement of a measurable and positive social impact as their focus.”
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6
7
8
9
“G8 Social Impact Investment Forum, Outputs and Agreed Actions”, Cabinet Office, G8 UK, July 2013
Australia, Canada, France, Germany, Italy, Japan, UK, USA.
Impact investment :the invisible heart of markets, report of the social impact investment taskforce, 15 Setptember 2014. See all the
nanational reports on http://www.socialimpactinvestment.org/
EESC 11September 2014, INT/747 Social Impact Investment
Unlocking the potential of the Social Economy for EU Growth: the Rome Strategy, under the Proceedings ot the Rome Conference,
November 17 and 18, 2014.
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Social impact investing and its role in the future social public/private investments,
Continuing dialogue
Conference in the European Economic and Social Committee (EESC)
Building Van Maerlant (VMA), 2 rue Van Maerlant, 1040 Brussels
Interpretation EN/DE/FR
th
Please register HERE until Wednesday, the 11 of February 2015 at 12h00
Interpretation EN/DE/FR
Impact investing is pushed forward as new way of tackling social questions in a new financial environment:
new financial market players will meet the financing needs of social players and help indebted states and
weakened banks to finance social enterprises.
“Impact investing” has been put on the G8 agenda. It is also argued that measuring the “social impact” of
organisations is important for planning public action. The impact of ‘impact investing’ approach on social
enterprises and social services of general interest deserves all our attention. The conference will focus on
leading questions, under the perspective not only of investors but of associations, enterprises and clients and
citizens as well: why and where is impact investment useful and possible, why and where not?
9 h-9h20: Welcome:
Ariane Rodert, vice-president of EESC Group III. Presentation of EESC opinions on social impact and on social
impact measurement
9h20– 10h40: Panel: The different “social impact investment” approaches in G8 countries: what objectives,
what propositions?
Moderator: Sybille Mertens, Chaire Cera « Cooperative and Social Entrepreneurship », Centre d’économie
sociale, HEC-Ecole de gestion ULg
- Kieron Boyle, International G8 Social Impact Taskforce under the UK’s presidency of the G8, «Impact
investment: the invisible heart of Markets”,
- Michael Sommer (Germany); Hugues Sibille (France); Mario Latorre (Italy): 3 national opinions and
reports
10h40 -11h: Coffee break
11h00 – 11h20: Further steps of the European Commission in the field of “social impact investment”
Lieve Fransen, Director, DG Employment, Social Affairs and Inclusion, European Commission
11h20h-12h45: “Impact investment”: why, where and how?
Moderator: Antonella Noya, Senior analyst, OECD/LEED Forum for SSE
-
Eve Chiapello, Policy Professor EHESS, Centre d’Etudes des Mouvements Sociaux
Heather Roy, Social Platform President
James Hopegood, Policy Analyst, DG Financial Stability, Financial Services and Capital Markets,
European Commission
Members of the European Parliament : Tom Vandenkendelaere, member of ECON and substitute
member of EMPL & Marie-Christine Vergiat, member of the Social Economy Intergroup
12h45- 13h: next steps, points of discussion, follow-up:
Nicole Alix/Matthieu de Nanteuil, Confrontations Europe
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