Accelerating 'New Capitalism'
Listing Incentives for Impact Corporations
The new owner of a Dutch media company has expressed intent to delist it as it's transition from print media proved to be challenging and it's new media attempts have sparked controversy. Financial reporter Durk Veenstra @RTLZ, a Dutch business news channel, supports delisting as it is both cost & transparency saving. And less transparency can be beneficial in a shrinking & competitive market.
#Think different
In New Capitalism*, companies' license to operate is based on their contribution to societal solutions. New Capitalism can be accelerated by listing e.g. social enterprises as it requires (financial) transparency. Insights in for instance businessmodel, strategy, innovation & investments etc are useful for investors and competitors. Companies also offering societal solutions which means they can observe, adapt, save money and scale faster.
'Better a good copy than a bad original'
A social entrepreneur almost listing at @NPEX, the Dutch SME exchange recently told me finalizing the prospectus ''is a lot of work....''
And that is just assembling the financial data for the IPO. Next is publishing quarterly & updates, annual reports, investor presentation etc.
Imagine how interesting it is as impact is added.
Stock Exchanges can take the initiative in incentivizing listing of impact investments, by copying the London Stock Exchange, LSE.
It doesn't charge for charity bonds listed at it's ORB retail bond platform. Present listings are easily accessible through search (charity bond). Ast the moment asset backed bonds for supported social housing are most prominent and the Charity bonds publish (annual) impact reports. The UK social investment market also has a unique listing vehicle: Retail Charity Bonds (Plc)
The Government of Singapore has a grant scheme for the additional costs of
labeled Green or Climate Bond listings. The first Climate bond was listed in 2007 (EIB in Luxembourg, at present 'top' lister with 100+ and a Green Xchange). In 2017 emission reached 157 Billion US$. Expectations for 2018 range from 250-300 Billion US$. A noticeable market share and all bonds come with impact metrics based on thematic standards & criteria and external verification.
The Dutch Development bank FMO supports Kenyan financials with a framework to create the industry’s first pooled green bond facility.
For public equity impact investing it makes sense that stock exchanges and governments accelerate impact investing through listings. To liberate New Capitalism from the chicken-egg problem of lack of initiatives, by lack of access to finance and supportive regulation. It will accelerate the sector through the transparency and spark market analyst interest. Always keen on IPO's social enterprise listings offer the opportunity to broaden & deepen knowledge & skills in the field op impact ie total return of companies & investments.
How about it?
Alcanne Houtzaager
Impact Investing Trendwatcher & Accelerator
Flashback: I called on stock exchanges to develop impact indices, such as the Euonext Amsterdam biotech index. Think also companies delivering basic needs (value stock) and impact tech promising steep yields (growth stock).
Tricky as most listed large caps in the main indices aren't impact investments or even excluded. Largecaps also often have mixed activities with maybe serious investments in impact / STAR activities, but at present modest turnover & profit margins. Potential Impact Growth Stock in transition towards offering only New Capitalism 'societal solutions'.
*Beinhocker & Hanna https://www.mckinsey.com/global-themes/long-term-capitalism/redefining-capitalism