With a collective market capitalisation of member firms fast approaching £2 billion and a now-proven ability to attract fund managers who between them control assets worth as much as the entire FTSE-100, the Social Stock Exchange – the UK’s new market for impact – has achieved some significant milestones over the last three months. New members have joined and the exchange is cultivating a panel of Social Company Advisers. An oversubscribed investor conference has been hosted, which attracted fund managers with a collective AUM of almost £2 trillion, whilst the first regional social stock exchange has also been launched. And as a business, the Social Stock Exchange has also been granted B-Corporation member status. To help keep track of progress, this quarterly update has been produced to consolidate all these key events into one place.
Membership is granted on an annual basis, with applicant companies having to submit impact reports for ratification by the independent admissions panel each year. Eight of the founder members from 2013 have already had their year three impact report approved and in recent months we have welcomed a further twelve new members. The total membership roll now stands at 27 firms, with a collective market capitalisation of almost £2bn – a number that has been bolstered by founder member Assura’s successful £300m capital raise in September 2015.
Broadway Partners is a provider of communications infrastructure, including broadband internet services to rural communities.
City Windmills Holdings develops powerful wind turbines that run on a vertical axis so they’re suitable for mounting on rooftops and the most compact models are no larger than a residential chimney stack.
ETHX Energy is a renewable energy company delivering cost savings and reducing carbon emissions for local authorities, housing associations and communities by supplying low cost energy from biomass.
Greenkote is a developer of an ecologically sound surface treatment to protect against the corrosion of steel components in civil construction, energy infrastructure and transportation.
Home from Home Care, created by parents to make the difference, provides a range of specialist needs-led services for adults from 17 upwards with learning disabilities and complex support needs.
Hydrosense is a provider of low cost hydroelectric power using Archimedes screw technology.
Obtala Resources has created a multi-industry African centred business focused on creating value for all stakeholders whilst providing positive social impacts in the countries, economies and communities in which it operates.
SOLA Outreach brings small non-profit organisations to the market of social change, with the aim of impacting disadvantaged lives through the reduction of social exclusion.
Solarus, a private company founded in 2006, develops, produces and sells hybrid solar PowerCollectors.
Sterling Suffolk will cultivate and harvest premium varieties of tomatoes in modern glasshouse utilising heat from waste in the UK reducing food miles.
Straightline Aviation (Hybrid Aircraft) is developing a completely new form of aircraft, akin to an airship, that will revolutionise air transport, dramatically reducing the cost and carbon footprint of moving passengers and cargo.
Synapse Electroceutical operates in the medical technology sector, developing electroceuticals, which can effectively and quickly heal wounds using tiny electrical pulses rather than traditional medicines.
Tomas Carruthers, Chief Executive of the Social Stock Exchange, commented:
“To almost double our membership over the last three months is testament to the fact that companies find being part of the Social Stock Exchange makes a meaningful difference when it comes to raising capital and finding supportive investors. Less than 40% of those who apply are awarded membership, but interest remains very strong and we are confident that the pace of recruitment will build further in 2016.”
Social Company Advisers
In October, the Social Stock Exchange launched its Social Company Adviser (SCA) scheme. SCAs play an essential role in the eco-system of the Social Stock Exchange by providing a range of professional services to Social Stock Exchange issuers, including corporate finance advice and impact reporting guidance. These organisations are committed to working with the Social Stock Exchange to build-out the world’s first social and environmental impact investing market, and to expanding impact investing into the mainstream.
16 SCA members have signed up so far, namely: Albert Goodman, Bates Wells Braithwaite, Bishop Fleming, Clearly So, DKLM, GRM Law, Investing for Good, Millenium Associates, Pier 11, Resonance, The Brooke Consultancy, The Transition Group, Third Way Africa, Thor Lion, Wedlake Bell and ZAI Corporate Finance.
Richard Cook, Chief Operating Officer of the Social Stock Exchange, commented:
“The Social Stock Exchange is keen to work with all organisations within the sector to provide prospective and existing members access to expert advice regarding their membership needs and the context of being a business that invests for impact. As such we are always looking for more Social Company Advisers to help support our members.”
Annual Investor Conference
Running as part of Good Money Week, the Social Stock Exchange hosted a one-day investor conference in central London in mid-October. Delegates included fund managers with almost £2 trillion worth of assets under management and the event was notably oversubscribed. Based around the idea that public financial markets can deliver a social or environmental impact, attendees coming from a wide range of backgrounds heard from a panel of over 20 highly qualified speakers. These included Sir Ian Cheshire, the former Chief Executive of retail giant Kingfisher plc, who is now the Chairman of Menhaden Capital, an investment trust established to support the efficient use of energy and resources. A number of Social Stock Exchange member firms also played an active role in the conference, both by participating in panel debates and having the opportunity to pitch their business proposition to the assembled audience.
Regional Stock Exchanges
Since the closure of regional stock exchanges across the UK in the 1970’s, investment decisions have become ever more London-centric, yet this is at odds with the increasingly democratised nature of financial services we desire today. Opening social stock exchanges on a local basis allows regional investors to invest in regional projects, with the added benefit of an active and liquid secondary market. This is important as for these investments to be considered accessible to all, investors must be able to buy and sell at a time that suits them. Networks of local professional advisers have been developed to increase awareness and access to the exchange.
Furthermore, impact investments have the ability to deliver utility beyond a pure financial return. Projects such as rural broadband or the provision of local childcare have the ability to improve the overall quality of life for those in the area, as well as providing a potential financial return. Having worked closely with Exeter City Council, Devon County Council and East Devon Council, the first regional social stock exchange was launched covering the South West, in September 2015.
In September, the Social Stock Exchange was proud to announce that it had been granted the status of a Certified B Corporation, making it part of a global movement with one unifying goal – to redefine success in business. B Corporations are those that meet higher standards of social and environmental performance, transparency, and accountability, as certified by B Lab. The Social Stock Exchange comfortably passed this assessment to join a growing community that currently includes over 1,400 B Corporations in 42 countries, representing 130 industries.
Tomas Carruthers, Chief Executive of the Social Stock Exchange, commented:
“It is only right that if we are demanding our members hold themselves to exacting standards when it comes to doing business, that we should do the same. Becoming a certified B Corp allows us not only to effect change ourselves, but also to demonstrate our commitment to these principles to the wide range of companies we interact with on a daily basis.”
The Social Stock Exchange will continue to issue quarterly updates, but for real-time developments, please visit www.socialstockexchange.com.
About the Social Stock Exchange
The Social Stock Exchange was launched in June 2013. The aim of the exchange is to help businesses that deliver a social or environmental impact connect with investors and unlock capital at scale. All issuer member companies must meet a rigorous set of criteria before joining, including the publication of an Impact Report.
In January, the Social Stock Exchange and ICAP Securities & Derivatives Exchange Limited (“NEX”) launched a branded market segment for impact businesses. NEX is a Recognised Investment Exchange operating a regulated market and a growth market and provides a secondary market trading facility. NEX is supervised by the Financial Conduct Authority (“FCA”).
For more information please contact:
T: +44 7973 284 749
Social Stock Exchange
T: +44 (0) 203 7516 443