Interest in impact investing grows in Finland
This spring Sitra has been investigating the possibilities for testing and implementing impact investing in Finland, including creating the necessary ecosystem and related models.
In practice the efforts have included conducting various interviews, organising events, reading materials and literature and taking part in international events. The latest event was an Impact Investing workshop held on Tuesday 8 April at Sitra’s offices, where a group of relevant parties representing the public sector, business, commerce, non-governmental organisations (NGOs) and investors gathered together to talk about and hear presentations on the topic.
The workshop was exciting in that it involved around 35 people who were all interested in the field of impact investing and its opportunities in Finland, and who represented diverse aspects of society. Their discussions provided a good basis as to what we should all do in order to build a well-functioning ecosystem for impact investing in Finland, which would serve society in a variety of ways. The talks were preceded by presentations from Shawn Westcott, Chairman of Impact Invest Scandinavia, Juha Leppänen, Researcher from Demos Helsinki and Kari Aalto, CEO of The PopUpCompany.
Shawn Westcott started by explaining what impact investing is, what form it has taken in different parts of the world (and, particularly, in Sweden) and how the related ecosystem could be developed in the Nordic region. Westcott identified some great existing and future opportunities in the field.
Juha Leppänen from Demos Helsinki described the results of an analysis of relevant operators in Finland in terms of impact investing and how prepared they would be to receive impact investments. Relevant operators were found among NGOs, social enterprises, start-ups and traditional businesses.
Kari Aalto from The PopUpCompany presented the Social Impact Bond (SIB) model, views on the model from four Finnish cities and suggestions for building an SIB market in Finland. All the cities considered the SIB model to be an interesting, if challenging, opportunity. With regard to building the market, The PopUpCompany suggested carrying out individual trials to create a market step by step.
After the presentations, the attendees split into small groups for the workshop portion of the event, to consider how a functioning ecosystem of impact investing could be built in Finland that would offer both private individuals and traditional investors the opportunity to channel their capital towards organisations with a social agenda. They identified proposals, ideas and methods for promoting a market in which the strategic target could be achieved. First, impact metrics must be developed and adapted to Finnish conditions; second, the value of financial profitability should be possible to prove; and third, awareness of impact investing should be disseminated in order to create demand for related products. The main social challenges to which impact investing solutions could be applied must be identified.
Collaboration between various bodies and operators in society should be increased and, conversely, the risk of impact investing should be reduced, for example by offering portfolio investment opportunities. With regard to private individuals, the workshop attendees suggested promoting crowdfunding. They considered it essential to tackle the development of the market and related actions quickly through agile, experimental and replicable measures. They felt that pilot projects and trials were particularly important because they can be used to establish impact metrics, increase awareness, ascertain potential successes and failures and build confidence.
The workshop clearly indicated that there is interest in impact investing in Finland, as well as many existing and future opportunities. Sitra has vowed to continue its work on the issue and is urging all those with a stake in the field to do their part by helping to bring impact investing to Finland.
Sitra thanks all those who took part in the workshop. The workshop materials can be found below.