Guest Post: Ecosystem Marketplace

At $3 Billion Per Annum, Biodiversity Markets Dwarf the Voluntary Carbon Market

The biodiversity market posted at least $3 billion in transactions last year, showing steady growth, according to a new report out from Ecosystem Marketplace. The “2011 Update: State of Biodiversity Markets” tracks biodiversity offsets and other compensation mechanisms globally, taking a look at new activity since last year’s benchmark report, “State of Biodiversity Markets.” The new report finds between $2.4 and $4 billion worth of transactions. Actual market volume is likely much higher, since price data is unavailable for about 80 percent of transactions, according to Ecosystem Marketplace.

Most of the action is happening through ‘mitigation banks,’ which generate credits from ecological restoration projects that can be purchased by any party looking to offset their environmental damage, either voluntarily or to comply with the law. (Regulated offsets take place within a ‘mitigation hierarchy’ framework; offsets can only be purchases if all other options – avoidance and minimization – can be exhausted.)

Guest Post: Mick Minard, REEF Reports

Visual Journalism and the Growth of Social Capital Markets

At the intersection of private enterprise and social service delivery, a new generation of social entrepreneurs are launching viable ventures to address our most pressing social challenges across an array of geographies and sectors. A new investment class is rising to meet their needs, and there is a groundswell of interest across the globe to invest capital for both social and environmental impact in addition to a financial return.

As these worlds intertwine, relying on common bonds of urgency and purpose, this nascent relationship between social enterprise, impact investors and communities worldwide will require a communications strategy that captures and reports the entire spectrum of meaning and metrics to inform investment decisions, attract capital, satisfy stakeholders and influence policy.

At the end of 2010, I started to design a visual communications strategy that would capture and convey the real wealth and higher purpose of the impact investing sector: the creation of an enabling environment for people to enjoy long, healthy and creative lives. I explored the role of social sector capacity-building, strategic communications and documentary photography (i.e., my profession) in the creation, growth and sustainability of social capital markets (estimated at around US$400 billion to US$1 trillion.) With the explosion of digital and social media, I wondered whether the transformative power of visual journalism could be a new business strategy for this emerging social movement and new asset class. Would I create new visibility and legitimacy for social enterprise and impact investing, drive awareness of issues and adoption of innovations, through a mobile, photojournalistic platform? If so, it would need to achieve the following:

•  Inspire collective action and coordinated innovation, encourage alliances, build industry infrastructure
• Support the identification, capacity-building and scaling of market-ready and worthy social enterprises, and help to direct significant new capital flows to these enterprises
• Complement and reinforce emerging and established industry standards, systems and integrative reporting practice
• Capable of spanning boundaries and communicating across sectors, while appealing to a wide spectrum of key stakeholders with diverse financial expectations and social interests
• Translate social processes, complex connections, issues and technical topics to make them intelligible and compelling for non-specialized audiences
• Catalyze critical conversations about the nature of social change

Early in 2011 I founded REEF Reports (Realizing the Ecosystem Effects of Finance) 
to document, communicate and publicize impact investing opportunities and successes worldwide by using the most powerful tools that humankind has devised: storytelling and photography. Paired together, these art forms have proven capable of facilitating and translating highly complex social processes, while expanding our consciousness, reflecting our times and testing our courage.

- Mick Minard, Strategic Communications Consultant

Guest Post: One Planet Investments

Top 5 Dirty Secrets of Impact Investing

1. Any investment can be an impact investment, by adding environmental, social and governance (ESG) objectives in addition to financial return targets.

2. “Impact Investment” as a formal discipline only emerged in 2007. While some of us have done social investing for decades under different names, most teams and managers (as well as social entrepreneurs) are relatively new/young. Experience is critical to success, but relevant track records and benchmarks are scarce.

3. “Market Rate Returns” don’t exist – at least not in the form of 25% IRRs. Some years investors (VC, PE or mutual fund) do well, some years they do very poorly. What you should look for as an investor, or aim for as an entrepreneur, is a commercial rate of return.

Mission Markets Issuer Perspectives: Quantum Intech

Three Often Ignored Factors in CSR – Are you doing all Three?

Corporate Social Responsibility begins with self-responsibility. If not, social responsibility can’t sustain. When we aren’t self-responsible, we drain personal energy needed to power our social mission. We punch a hole in our energy bucket, limiting our effectiveness. Social responsibility is not an entity that survives with people feeding it only when they have energy to do so. It is an expression of who we are, individually and collectively. There is a consciousness shift going on, and part of the shift is realizing that the end cannot justify the means. We have to be the change we want to see. It’s just math. To do that, we have to include three often ignored factors in our definition of sustainability:

1.    Emotional Sustainability – balance and self-management of our emotional energy expenditures; emotional alignment
2.    Mental Sustainability – managing time and overload
3.    Environmental Sustainability (internal) - healthy attitudes and behaviors; respect and care for others and for oneself

Communications Barriers in Impact Investing: A perspective from Mission Markets issuer member T. Wright Dickinson

The topic of sustainable and impact investing often brings together an unlikely crowd, from tree-huggers to philanthropists to Wall Street veterans. While it can be a fascinating and productive combination, there are clear challenges in communicating between these groups that can impede progress in accomplishing our overarching goal—to create positive social and environmental value through investment strategies.

T. Wright Dickinson, a fourth-generation rancher of Vermillion Ranch and issuer member on Mission Markets, shared with me some interesting perspectives based on his experiences on the farm and at conferences.

“My work as a cattle rancher is informed first and foremost by an appreciation and love for natural resources and stewardship of the environment that we are entrusted with,” says T. Wright, when asked what gets him out of bed every morning. “I was raised with an ethic that we want to leave the land better than we found it. Along with our traditional livestock production, I see our ability to provide environmental services like clean air, clean water, and species preservation, as a sustainable business model for my family’s operation.”

Guest Post: Educate!

Investing in Africa: Enterprising Education and Microtechnology

When I first sat down to research the Ugandan market, I read a statistic which made me first smile with giddy anticipation and then shiver in trepidation: over 50% of the Ugandan population is under the age of 18. Uganda has a population of over 32 million people. I smiled because that means my field, education, must be a thriving industry; however, as a teacher I know the hazards of fitting such a large a number of youth together into classrooms and the dangers of leaving them out. 

I am in the business of Enterprising Education. It is a new field of social entrepreneurs who recognize that the factory-model education we inherited from the 19th century cannot be exported around the world to markets such as Uganda where there are millions of young people living on two dollars a day. The solution is neither more low-quality public schools nor more traditional private schools. The growth is in entirely new models of education enterprises. I am part of a global network of social innovators with solutions on how to educate the world in self-sustainable schools or without classrooms.  This method allows students to earn and learn at the same time by using new cost-saving technology such as cell-phones, community-based web portals, and even youtube.com!

Reporting from SOCAP Europe: Mission Markets Goes International

Greetings from old Amsterdam! I am sitting with Steve Rocco (Mission Markets Co-Founder) in the foyer of a building that was built when New York was New Amsterdam, and the wireless internet is faster than in our offices in Soho.  SOCAP picked a great spot for its inaugural European conference.

The conference is sold out (again, that makes three years running!) which bodes well for the social capital markets in general, but it makes for an awful lot to absorb in just three days.

I presented Mission Markets to a global audience of impact investors (yes that's me in the photo) yesterday, and am pleased to report it went smashingly well.

We were already pleasantly surprised how well-known Mission Markets was here on The Continent before our session, and afterwards it only got better.  We may not be a household name yet, but within this admittedly small pond, we're pretty big fish and it feels terrific.