(Resources) X (Social Networks) = Potent Triple Returns
How social and environmental challenges can be turned into opportunities, return and potential using market concepts could be witnessed at the CEE Impact Day in Vienna. Anything bad is good for you – if we develop the ability and agility to see challenges as investment opportunities and tackle them though impact investing and social entrepreneurship. The CEE Impact Day at Impact Hub Vienna has given strong evidence of this new nascent market paradigm. While the social welfare state has been a successful concept to address the challenges of the 20th century, social entrepreneurship and impact investing may well be the recipe of the 21st century.
While many old systems are running dry of money and need to reinvent themselves or die, the movement building works undertaken by pioneers like Charly Kleissner , Impact Hubs, Ashoka and the Social Stock Exchange- to name a few, begin a to win momentum. New forms of co-operation, co-work and a new language are proliferating into investment and social banking. Social Banking and Impact Investing uses the nowadays highly sophisticated instruments developed in investment banking like social bonds, green bonds and pay – for – performance schemes and new intermediaries like the social stock exchange alongside with a strong focus on creating solutions for social and environmental challenges, the world is facing today.
The Impact Hub has a centre role in establishing the fertile ground these new potentials. Some examples of how these Social Enterprises can be profitable were presented as award winners at the CEE Impact Day. I have picked Magdas Hotel, a hotel run by 20 refugees and 10 professionals addressing the challenge of migrants to find work. The hotel is a rebuild retirement home, offers rooms in a chilly atmosphere and at the same time a wide range of cultural events.
A lot of players support this new field of enterprising and investing like Erste Bank Foundation who has co- initiated the first Social Bond in Austria, Impact Hub who runs various programmes in cooperation with partners like the Investment Ready Programme (IRP) and the Scaling Programme to mane a few.
The CEE Impact Day provided strong evidence on how successful the Hub has been in establishing a new eco-system for triple bottom line and impact investing and that it has been a change agent and enabler for social entrepreneurship, NBO and Tec’s.
I differentiate the two by the indicator whether or not a sound theory of change is applied. Triple bottom line investment does not necessarily imply a theory of change, impact investment does. Charly Kleissner, Co-Founder of KL Felicitas Foundation reiterated and emphasized the importance of the movement building works in addition to a TBL approach in investing, which needs to go on with investees, investors and intermediaries and develop increased attraction and buy in.
Charly himself once again demonstrated in his speech that he is an excellent ambassador, supporter and campaigner for impact investing and social entrepreneurship and announced that he will make available his portfolios for scientific research on impact investing to universities and scientists. Uli Grabenwarter, Deputy Director Equity Investments of the European Investment Fund stressed “ we have to hold ourselves (investors) responsible for the success of impact investees and do everything to support them.