This month more than 2,500 people gathered at the ninth Social Capital Markets (SOCAP) conference, billed as the intersection of money and meaning. The conference is designed to be the place where businesses built to solve the biggest problems meet investors, peers, partners and those who make it happen. Launched in 2008 in the midst of the economic crises, the conference has grown is size and scope. Coblentz was thrilled to have had the opportunity to sponsor, attend and speak at this event and we came away with the following takeaways:
- More and more entrepreneurs are engaged in business-based ventures aimed at solving problems that used to be the exclusive domain of non-profits and government agencies. While a non-profit’s mission is often focused on eliminating problems created by capital markets, these for-profit ventures seek to tame the market to solve problems like climate change and systemic wealth disparity.
- The topic of “scale” was forefront in many of the plenary discussions. Non-profits and social enterprises are eager to learn how to take best practices in a specific industry or issue area and expand their impact to other geographic locations or in order to reach a broader demographic, but struggle with finding appropriate funders. Conversely, many impact investors expressed how difficult it can be to find out about projects in need of funding.
- Many of these enterprises generate market rate returns and dispel the myth that there must be a trade-off between financial and impact returns. As explained in one plenary session, recent studies from Cambridge Associates, the Global Impact Investing Network and Wharton School of Business indicate that investments in impact companies frequently yield a rate of return that is nearly identical to benchmark indices such as the Russell Microcap/Russell 2000 index and the S&P 500.
- Social enterprise is not the exclusive domain of start-ups and nonprofits ventures. Participation at the conference by companies such as Etsy, Sephora, Uber and Visa attest to the fact that mid-market, mature and even Fortune 500 companies are interested in building their bottom line while working to improve their communities.
- Measuring and reporting the social and environmental performance and progress of impact investments is paramount to this industry, but not everyone agrees as to the best approach. Impact measurement varies based on goals, objectives and capacities. Despite the apparent difficulties in measuring impact in and across issue areas, many plenary speakers believe that the sector is growing closer to developing a common set of metrics so that success in impact investments can be effectively measured.
- Family offices, often at the direction of “next generation” family members, have been pioneers in impact investing. Family offices will continue to shape the field, as they hold substantial assets under management, have long investment horizons and enjoy broad investment flexibility. At one panel discussion, family office investment professionals remarked that they expect impact investing to increase as next generation family members step into more prominent roles, as impact measurement improves, and as more investment opportunities come online.
You can watch video recordings of many of the presentations on SOCAP’s YouTube Channel.