Ethical Performance
inside intelligence for responsible business


social stock exchange could get 2009 launch

May 2008

A ‘social stock exchange’ trading shares in responsible businesses could be set up next year if a feasibility study finds sufficient demand.

The study is funded with £252,000 ($496,000) from the New York-based Rockefeller Foundation and will be conducted in the UK by Mark Campanale, a former SRI specialist at Henderson Global Investors, and Pradeep Jethi, formerly new product development manager at the London Stock Exchange.

Antony Bugg-Levine, Rockefeller Foundation managing director, said Britain had been chosen for the study in part because the UK government had created a form of incorporation for ‘community interest’ companies in July 2005. A total of 1677 have since been registered.

He claimed that the lack of a dedicated stock exchange for social enterprises ‘inhibits some very good companies from gaining the expansion capital that they need’ and suggested a social stock exchange may accept trading in firms with as little as £500,000 in annual turnover and two years’ trading history, typically in healthcare and clean technology.

The London Stock Exchange told EP it would welcome the idea ‘if it is going to create more investment and liquidity’.

However, Rodney Schwartz, CEO of Catalyst, a London-based firm serving the social business sector, said: ‘There is a real risk that the Social Stock Exchange will displace efforts already underway to ensure that social businesses and social enterprise secure the capital they need.’ A ‘rough balance’ between capital and ‘backable social enterprises’ already existed and time would be better spent on lobbying for revisions to regulations that make it hard to raise capital for social enterprise, Schwartz added, in comments made in his online blog.

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