The Social Stock Exchange, which focuses on ‘profit with a purpose’, is preparing for a full launch in Edinburgh, providing access to the world’s first regulated exchange dedicated to businesses and investors seeking to achieve a positive social and environmental impact through their activities.
The Scottish Social Stock Exchange was established in 2016, with the support of the City of Edinburgh Council. Globally there’s a growing demand for impact investing – that’s providing financial backing for projects that deliver a positive social or environmental impact as well as a profit.
Mike McCudden, director, The Social Stock Exchange:
“The City of Edinburgh Council were quick to understand the benefits that impact investing could bring to both the local and national economies, so given Edinburgh’s long standing reputation as a global financial hub, setting up in the city was an obvious choice.”
However, retail investors can find this market difficult to access, whilst the businesses providing the impact can find it hard to access the necessary capital market. The Social Stock Exchange are bridging that divide. They have had a very positive response from Scottish investors who would like to know that their money is providing a positive impact as well as delivering them a financial return.
Today, more than 5,000 social enterprises exist across Scotland. The sector contributes more than £1.68bn GVA to the Scottish economy and supports more than 100,000 jobs; but the true value of social enterprise is its ability to help address some of society’s toughest challenges.
Leading the line
Edinburgh is at the forefront of Scotland’s social revolution. The city is currently home to 13% of all of Scotland’s social enterprise businesses that deliver a real social or environmental impact.
“The City of Edinburgh Council were quick to understand the benefits that impact investing could bring to both the local and national economies, so given Edinburgh’s long standing reputation as a global financial hub, setting up in the city was an obvious choice.” says Mike McCudden.
Although the Scottish Social Stock Exchange currently employs two members of staff in Edinburgh, given the wealth of financial services talent that is available, they envisage a significant degree of growth in the years ahead.
Reducing wealth inequality
For too long, public financial markets have been failing in their most basic objective – that of serving the needs of the public as a whole. This disconnect is driving wealth inequality, so the mission of the Social Stock Exchange is to return democracy to capital markets.
“If you are a pro-social or pro-environmental business, you should have the ability to tap capital markets on the same risk-adjusted basis as any other company.” states McCudden
“Equally, if you are an investor who recognises the wider benefits of having a portfolio that delivers a social or environmental impact, you should be able buy and sell shares in these companies in a liquid market. This is what the Social Stock Exchange will deliver.”