The role of big finance and technology in social change is rapidly evolving. This book examines why large financial players are entering the social sector through social finance. Drawing on empirical research, the authors analyse the opportunities this new interest and commitment presents as well as the potential harm that can be done to vulnerable people when beneficiaries are not treated as partners and the social needs of people are not placed at the centre of the investment model. This book introduces a ‘Deliberate Leadership’ framework to help big finance tackle problems with no easy solutions. The book also analyses how current technologies (including blockchain) are being used and the benefits and drawbacks of different features of these technologies from the standpoint of the beneficiary and investor. The authors derive a series of insights into the model of technology for social finance and impact investing. Written as a practical book for students alongside a field book based on an action learning methodology, this volume will be useful to those in social finance and impact investing.
Author(s): Gayle Peterson, Robert Yawson, Ellen JK, Jeremy Nicholls
Series: Palgrave Studies in Impact Finance
Publisher: Palgrave Macmillan
Year: 2020
Language: English
Pages: 187
City: Cham
Preface
Reference
Acknowledgments
Contents
List of Figures
List of Tables
1 Big Finance, Big Technology, Wicked Problems, and the World’s Poor
The Basics: What Are Big Finance, Big Tech, Social Finance, and Wicked Problems?
What About Big Tech?
What Is Social Finance?
Who Are the Players in Social Finance?
The Social Finance Movement
Big Finance and Big Technology’s Role in Social Change
Sustainable Development Goals: Solving the World’s Wicked Problems
What Are Wicked Problems?
A History of Wicked Problems
Conclusion
References
2 Wicked Problems and Deliberate Leadership: Finding True North
Deliberate Leadership Framework
Courage
Collaboration
Creativity
Community
Candor
Capital
Compassion
Deliberate Leader Learning Process
Conclusion
References
3 Promise and Peril of Big Finance
Big Finance and Sustainability
ESG Challenges
Lack of Compatibility
The Exxon–Tesla Challenge: Which One Is a Better ESG Investment?
Lack of Standard Rules
What Is not Included
Lack of Adequate “S” and “G” Metrics
Capturing What Happens in Supply Chains
ESG and Tales of Two Climate-Focused Investors
Making Money Through Mission: ESG and Climate as Risk Management
The Energy Sector Is a Chronic Underperformer
The Experts Are Often Wrong
Technological Disruption in the Energy Sector
Additional Risks to Owning Carbon
The Externalities: Hidden Costs of Not Transitioning to Renewables
Drivers of Investing in Renewable Energy
The Transition Is Coming
The Case of the McKnight Foundation Carbon Efficiency Strategy
Conclusion
References
4 How Do We Know? Measuring Impact
Ten Lessons About Impact
SDGs and Impact Measures
Impact Management Project
IFC’s Anticipated Impact Measurement and Monitoring System
Time to Scale Impact Measurement
The Challenge for Impact
The Current Economic System, Climate Change, and Inequality
Capturing Economic, Social, and Environmental Value
Financial Value and Financial Accounting
Why Measure?
Who Measures?
What Is Measured?
How to Measure?
The Wider Ecosystem
What Are the Lessons for Impact Investing?
The State of Impact: What Do We Mean by More Impact?
Why Measure Social and Environmental Impact?
Who Are We Measuring for?
Choosing the Option with a “Better” Impact
What to Measure?
How to Measure?
Who Measures?
The Wider Ecosystem
Nonfinancial Statements
Designing an Impact System
Bridging the Gap Between Financial and Impact Accounting
Conclusion
References
5 The Surround Sound of Technology as an Accelerator of Social Good
Introduction
Technology as an Accelerator of Social Good
Technology and the Role of Deliberate Leadership
Challenge 1: Control Over Technology’s Implementation
Challenge 2: Control of Assets and Cryptocurrency
Blockchain and Distributed Ledger Technology for Financial Inclusion
Property Rights and Blockchains
Modern Slavery and Blockchains
A New Channel of Philanthropic Aid for Charities
Challenge 3: Control of Voice and Privacy
Conclusion
References
6 From Theory to Practice
UBS and UBS Optimus Foundation
Drive to Scale with Development Impact Bonds
UBSOF’s DIBs
Educate Girls Development Impact Bonds
Educate Girls
The DIB: Partners, Committed Financing, and Measurable Results
The Partners
Financing and Payments
Results, Outcomes, Success
Lesson 1: Listen to, and Engage with, Community
Lesson 2: Build Early Alliances with Other Local Partners—Government and Teachers
The Next Step: Using Technology to Scale
Future-Fit Foundation
Future-Fit Foundation’s Approach
The Future-Fit Foundation Business Benchmark
Future-Fit, Future-Finance, Future-Technology
Is Future-Fit Anything New?
The Future-Fit Theory of Change
Progress to Date
Conclusion
References
Index
