Skip to main content

The gravity of the failure of 'free markets' is staggering. But when it comes to confronting the problem we often take a justifiable critique to an extreme conclusion: because markets fail they are bad. The truth however is that markets are what we make them. When it comes to our greatest challenges, including tackling climate change, we have to make markets work for us, not against us. That’s exactly what an exciting new start up, the Social Stock Exchange plans to do.

The SSE was founded by Mark Campanale (you may know him from his other recent venture – Carbon Tracker – which provided Bill McKibben with Global Warming's Terrifying New Math) and Pradeep Jethi to develop the world of global impact investing. Impact investing is a relatively new phenomenon that uses markets for a shocking goal – to make the world a better place. The SSE hopes to support that goal by creating: "A platform that enables wealth managers and social impact investors to find and invest, at scale, in global businesses in sectors such as affordable housing, social transport, ethical consumerism, clean technology and renewables, urban regeneration, public health, education, and businesses overseas that serve the base of the pyramid."

Their vision is essentially to re-embed markets in social structures which they have become increasingly free of since the advent of the industrial revolution. To deliver on their lofty goal the SSE forces companies to prove their commitment by completing a Social Prospectus (SP) that discloses principles of social value creation. That may not sound groundbreaking but can you imagine a coal or oil company attempting to do that? "We plan to create products that will make millions of kids sick with asthma, drive climate change over a cliff, and drive economic inequality to historic levels." Exactly.

So how does this work in the real world? Take the Converging World, a UK based charity that finances clean energy in India. It needs $10 million to expand the 4.5 MW of clean it has installed to 250 MW over the next three years (181% CAGR!). The problem is that amounts this small are nearly impossible for development minded institutions like the IFC to finance so despite its positive impact, and profitability, Converging World may not scale. Which means India may not get clean energy for the hundreds of millions who currently lack power.

Enter the SSE and the 500,000 ethical investors in the UK investing ~$13 Billion to create the change they want to see in the world. The SSE will act as a bridge to this huge pool of capital by helping Converging World to issue shares on their exchange (just like a traditional corporation would). This bridges the funding gap allowing the company to access funds to support deployment of clean energy.

Which means just like crowdfunding, a social stock exchange can open up society’s ability to, by fiat, determine what is 'bankable.' More importantly it can do that based on social values, not arbitrary cost/benefit analyses or the profit motivations of faceless corporations that are unaccountable to anything other than their own greed. Because at the end of the day it’s not markets that we need to abolish, it's the power of entrenched interests. And the SSE gives society yet another means of achieving that end.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site