A national body will help channel private money towards improving well-being in society.
Impact investing facilitates the systematic creation of well-being – even in economically difficult times. The idea is to steer private equity towards projects aimed at benefiting society as a whole. Representatives of investors, the public sector, organisations and research institutes were invited to join the national steering group set up in support of the new investment and funding model. The steering group is fostering the model’s introduction and development in Finland. Impact investing is aimed at achieving a positive and measurable social impact as well as a financial return. It is an ideal form of investment for activities that boost well-being and prevent problems. The first projects were launched in Finland this autumn, and new ones are being planned in several municipalities. “New methods are needed to stabilise the public finances and finance well-being,” says Pentti Pikkarainen, Director General of the Financial Markets Department at the Ministry of Finance and chair of the national steering group on impact investing. “The funding of public services in Finland is currently focused not on foresight, but more on remedying the prevailing problems.” “Impact investing will help to expand the public sector’s funding base and slow the growth of the national debt. The model will also provide guidance to the state and municipalities in results-based purchasing,” Pikkarainen points out. The steering group members were announced at the Impact Investing 2.0 seminar at the Korjaamo Culture Factory in Helsinki in December. Pentti Pikkarainen, Director General of the Financial Markets Department at the Ministry of Finance, was invited to chair the group. Its members are Tom Liljeström, Managing Director of LocalTapiola Asset Management (vice chair); Teri Heilala, CEO, FIM Group; Antti Savilaakso, Chairman of Finland’s Sustainable Investment Forum; Ulla Nord, Managing Director, Me-säätiö; Risto E.J. Penttilä, CEO, Finland Chamber of Commerce; Jari Vaine, Senior Adviser at the Association of Finnish Local and Regional Authorities (Kuntaliitto); Vertti Kiukas, Secretary General, SOSTE Finnish Society for Social and Health; Sirpa Kekkonen, Head of Government Strategy Secretariat at the Prime Minister’s Office; and Anni Huhtala, Director General of VATT Institute for Economic Research. Sitra is represented by Timo Lindholm, Director, and Mika Pyykkö, who leads Sitra’s Impact Investing focus area, is secretary to the steering group. Deputy members are Veli-Mikko Niemi, Director-General, Ministry of Social Affairs and Health; Esko Torsti, Director, Ilmarinen Mutual Pension Insurance Company; Heikki Nystedt, Credit Portfolio Manager/Head of Fixed Income, Partner at Taaleritehdas Group; Jaakko Salminen, Chairman, Finnish Business Angels’ Network; Ilona Herlin, Kone Foundation, Vice Chairman of the Board; Kimmo Lipponen, Managing Director of Arvo-Liitto; Teemu Japisson, Secretary General of the Finnish Sport Confederation Valo; Taina Kulmala, Counsellor, Prime Minister’s Office; and Otto Toivanen, Professor, Aalto University.Mission and return all in one
One of the available impact investing instruments is the Social Impact Bond (SIB), which is a performance-based funding contract. Based on the SIB, institutional and private investors finance activities that promote well-being, while bearing the financial risks. The public sector pays only for measurable outcomes. “For investors, SIB provides the opportunity to have an impact on the societal issues closest to their hearts. SIB is an innovative combination of return, risk and social impact, an investment target that particularly appeals to institutions, foundations, families and private investors seeking a higher motive than mere profit in their asset management activities,” says Mr Pikkarainen. An increasing number of investors want a sense of mission as well as a financial return. No wonder then that the largest global asset management companies – such as BlackRock, Goldman Sachs, JP Morgan and Merrill Lynch – are active in the international impact investing markets, which are worth an estimated 55 billion euros in invested capital. “The national steering group will provide Finland with a doorway to joining the G8 of leading industrialised countries in its international development of impact investing,” says Mika Pyykkö of Sitra. On the United Kingdom’s initiative, in 2013 the G8 launched the Impact Investing Taskforce to prepare reports and issue recommendations on the promotion of impact investing.Two SIB projects published
For more than a year, Sitra has been building an impact investing ecosystem in Finland, preparing the first pilot projects in co-operation with various stakeholders. Much has happened in that time: the first ever Social Impact Bond (SIB) has been launched in Finland and the Nordic countries, and several new ones are being planned. The Impact Accelerator, which empowers businesses and organisations in the well-being sector, has also been launched. Finland’s first SIB aims to improve occupational well-being in the public sector. In the first phase, it will cover 1,300 public sector employees in Lounais-Suomen Maistraatti, Savon koulutuskuntayhtymä and Aleksia-liikelaitos (Nurmijärven kunta). Sitra, Me-säätiö, and a private financial investor will be the first anchor investors. The Ministry of Employment and the Economy and Sitra recently announced that they are preparing a SIB project to promote the employment and work-based integration of immigrants. Other SIBs planned around Finland are focused on preventing the social exclusion of children and their being taken into care, and easing the employment of people in a difficult market position. The Finnish Innovation Fund Sitra is a future-oriented organisation that promotes Finland’s competitiveness and the well-being of the Finnish people. Under the New working life and sustainable economy theme, Sitra is promoting the reform of working life and the sustainable economy through innovative practices and financing models. www.sitra.fi
Private finance helping the public sector
The impact of this SIB is measured in the number of sick leave days. The goal is a reduction of 2.1 sick leave days per employee per year. If the goal is met, public sector participants will realise significant savings, part of which will be returned via the SIB to the investors. Mika Pyykkö, Senior Lead, Impact Investing at Sitra, said: “Although the metric is sick leave days, this SIB targets material improvements in the occupational wellness and workplace well-being of the participants. This should become evident through quality-of-life improvements and more effective functioning of the employer organisation.” The economic effect of sick leave in Finland is approximately 7 billion euros a year. Within the public sector, sick leave accounts for some five per cent of total work time, translating to approximately 2 billion euros a year. Due to variations in bookkeeping practices between the sectors, directly comparable figures are not available. Sitra has been active in building an impact investment ecosystem in Finland for over a year now. It has worked on pilot SIBs with other partners, the most significant of which is the occupational well-being SIB that has been launched now. Sitra has decided to commit up to 1.5 million euros to Epiqus Occupational Well-being I as part of its own mission-related activity. The SIB model originates from the UK. It facilitates the use of private capital particularly for preventive interventions that the public sector often struggles to finance adequately. The international applications of the model include foster care, recidivism and long-term unemployment. The occupational well-being focus of the first SIB in Finland is reportedly the first such application worldwide. Epiqus Oy, the first regulated impact investment fund manager in the Nordic countries, manages capital to create measurable social and environmental impact alongside financial return. Epiqus dedicates 50% of its profits to social and environmental mission goals. Epiqus is AIFMD-registered (the Alternative Investment Fund Managers Directive), a member of the Global Impact Investing Network and signatory to the United Nations Principles of Responsible Investment. www.epiqus.com Me-säätiö, a foundation endowed by Ilkka Paananen and Mikko Kodisoja, is dedicated to reducing social exclusion and inequality in Finland, particularly among children, young people and families. The foundation actively seeks new innovative financing solutions for the social interventions that are at the core of its mission. www.mesaatio.fi The Finnish Innovation Fund Sitra is a future-oriented organisation that promotes Finland’s competitiveness and the well-being of the Finnish people. Sitra’s New working life and sustainable economy theme area promotes workplace renewal and economic sustainability through novel operating and financing models. http://www.sitra.fi/en/economy/impact-investing
Impact Investing: un movimento globale in ascesa
Secondo il Rapporto GIIN 2017, l’ammontare dei capitali investiti per progetti a impatto sociale è in continua ascesa
Il fenomeno dell’impact investing ha suscitato, fin dalle sue prime sperimentazioni, un grande interesse sia da parte degli investitori, attirati da un mercato caratterizzato da una minore rischiosità, sia da parte delle imprese sociali, interessate ad intercettare nuovi canali finanziari. In breve tempo, l’intento di conciliare ritorno economico ed impatto sociale è diventato un mantra valido per tutti.
Tuttavia per dimostrare che questo non è solo un fenomeno costruito sulle buone intenzioni ma rappresenta effettive opportunità è necessario costruire dei track-record che raccolgano con puntualità dati e siano in grado di restituire le esperienze fatte. Per questo il GIIN – Global Impact Investing Network da sette anni pubblica i risultati della sua survey annuale che coinvolge oltre 100 investitori e che, anno dopo anno, descrive come gli investimenti ad impatto sociale non siano più solo un mercato emergente ed immaturo bensì un movimento che si sta sviluppando a livello globale.Il Rapporto GIIN 2017
Il rapporto di quest’anno è stato costruito attraverso la somministrazione di interviste a 209 investitori in tutto il mondo, evidenziando così i principali avanzamenti e punti di interesse del mercato ma anche le sfide ancora da affrontare. I numeri più interessanti del report ci dicono che nel 2016 si sono registrate circa 8.000 transazioni ad impatto per un ammontare totale di 22 miliardi di USD. Rispetto ai rapporti del 2014 e del 2015, l’ammontare totale di capitali investiti è aumentato rispettivamente del 15% e del 3%. Numeri che non accennano a fermarsi: gli investitori prevedono, infatti, di aumentare nel 2017 il capitale investito del 17%, portando lo stock di risorse a circa 26 miliardi di dollari che si tradurrebbe in quasi 9.000 investimenti. Per il 98% degli investitori, inoltre, l’impact investing è un’ottima opportunità, che ha raggiunto e, in alcuni casi, superato le aspettative sia di impatto atteso sia di redditività economica. Secondo il report, la maggior parte degli asset sono in America e Canada (40%), Europa (14%), Africa sub-sahariana (10%), America Latina e Caraibi (9%). E gli investimenti sono equamente distribuiti tra i mercati sviluppati e quelli emergenti. Lo strumento finanziario prediletto dagli investitori coinvolti nella survey è quello del private equity per 159 intervistati, seguito dal private debt (113), mentre solo in 33 ricorrono ai real assets. Questo netto miglioramento forse è anche dovuto, come riferito sempre nel report, alla professionalizzazione del settore iniziata grazie all’ingresso di grandi aziende che oltre a portare competenze e professionisti hanno spinto per l’innovazione degli strumenti finanziari. Ovviamente buona parte degli investitori ha anche individuato nell’ingresso delle grandi imprese un aumento della competitività del settore nonché il rischio che diminuisca l’attenzione alla componente dell’impatto sociale.In che direzione vanno gli investimenti?
C’è un’evidente differenza tra mercati emergenti e mercati sviluppati. Nei primi infatti gli investimenti riguardano soprattutto l’accesso al credito e la creazione di impresa, quindi microfinanza e servizi finanziari. Nei secondi, invece, l’attenzione è per l’ambiente e per l’inclusione delle fasce vulnerabili della popolazione, con investimenti soprattutto in housing sociale, in progetti di riforestazione e in energia pulita. Tutti gli intervistati utilizzano metriche di misurazione di impatto quali-quantitative. Riferendosi agli investimenti giunti a termine, la metà degli intervistati ha risposto di aver raggiunto sia gli obiettivi sociali che quelli ambientali prefissati: il 41% ha individuato e raggiunto solo gli obiettivi sociali, il 9% solo quelli ambientali. E’ bene, però, sottolineare che per gli intervistati è difficile tracciare una distinzione netta tra questi due obiettivi. I rapporti annuali del GIIN ci aiutano, anno dopo anno, a delineare il profilo di crescita degli investimenti ad impatto. E se per il prossimo report del network bisognerà attendere il 2018, intanto a luglio un altro grande appuntamento è in programma per il mercato dell’impact investing: il plenary meeting del Global Social Impact Investment Steering Group, momento in cui investitori e imprenditori sociali si incontreranno per uno scambio di esperienze, mettendo nuovamente in evidenza la dimensione di “movimento globale” che caratterizza gli investi ad impatto sociale. This article originally appeared on secondowelfare.it.
