Sitra is studying the introduction of impact investing to Finland. This would require the creation of a new ecosystem and the testing of different models related to impact investing. Impact investing aims to solve societal challenges through new innovations and private funding. Such challenges may be, for instance, the danger of the unemployed becoming marginalised in society or careers ending with disability pensions. Impact investing helps reduce the financial pressure on the public sector and keeps some of the risks of testing new ideas in the private sector.
In order to build a well-functioning impact investing ecosystem much is needed beyond the willingness of private investors, the public sector, and innovative actors to tackle societal challenges. One also needs: 1) independent partners to assist with the measurement of results and the evaluation of success; 2) a community willing to set basic standards for impact investing activities; 3) investment funds to combine efforts; and 4) eventually even market makers to create a secondary market for impact investments. In practice, much of the ecosystem has to be created simultaneously for the combined whole to start working.
Sitra will be working on the feasibility of impact investing in Finland during the spring of 2014. If you have any thoughts, advice or comments, please do not hesitate to contact us!
Impact investing has been written about by Sitra’s director of business development, Sami Tuhkanen, introducing the concept “Can profitable investment be combined with a positive social impact?“ and by senior lead Marja Karttunen, who explored its development internationally “Impact Investing – sijoita ja vaikuta!“ (in Finnish).