Introduction
Introduction
In 2015 the Oikocredit Ecumenical Development Cooperative Society (Oikocredit) celebrates its 40th anniversary as one of the world’s leading private social investors. Reporting another year of solid results from its headquarters in the Netherlands, Oikocredit’s Managing Director, David Woods, says: “in the next five years we see ourselves as being the most socially responsible impact investor in the world, with a true mix of social, environmental and financial goals”.
Social investing – investing with a conscience
Over the past few years, the UK has seen unprecedented growth rates in social investing; estimated at 20% for retail investors and 250% for institutional investors (1) . Much of this is attributed to the Government’s recent introduction of a social investment tax relief (SITR); changes in financial regulations; and significant product innovation – all paving the way for easier access to a wider choice of products. But, it is hopefully also the result of a rise in so-called conscious capitalism and conscientious consumerism(2) – namely, universal recognition of the social and environmental challenges we face as a civilisation and planet, and a desire to affect positive change. In other words, this is about practising good stewardship of the earth; a stance shared by many, if not all faiths.
Those who are part of the UK social investment movement therefore range from faith-based institutions, charitable trusts and foundations who have a long history of social investment, to organisations looking to enhance their corporate social responsibility agendas (3) . But growth is also driven by individual investors – socially conscious, (often faith-based) high net worths, sophisticated investors and everyday savers (4) . What unites them all is a wish to ‘do no harm’, and to adopt a simple, meaningful way to contribute to positive change whilst finding a worthwhile home for their money.
Succinctly put by Clare Jones of ClearlySo: “social investing means considering risk, return and impact when making investment decisions, and choosing to invest in companies that are actively creating positive social or environmental impacts [for example, poverty or climate change alleviation]. It is a step further than divesting from negative impacts (for example, moving your investment portfolio away from fossil fuels or armament investments); it means using your money to consciously tackle society’s challenges – and to make a financial return”.
A movement within a movement
Whichever social and environmental challenges resonate with investors, there is no shortage of meaningful products in the UK – from shares, bonds and savings accounts to debentures, depository receipts and ISAs.
The market can further be divided into organisations that focus their social missions on international development – for example, Oikocredit, Shared Interest and Triodos. Oikocredit, for instance, offers withdrawable depository receipts, where investors’ capital is spread across fair trade, microfinance, agricultural and renewable energy partners to alleviate poverty in developing countries. On the other hand, there are numerous social enterprises exclusively focused on improving conditions affecting UK communities – for example, Allia, Big Issue Invest, Charity Bank and Ecology Building Society.
Most social investment products are also promoted by specialist UK intermediaries and portals such as ClearlySo, Ethex, Gaeia and Investing Ethically; as well as ecumenical social investor networks such as Churches Together (CTBI); the Church of England Ethical Investment Advisory Group (CEEI); and the Ecumenical Council for Corporate Responsibility (ECCR).
Oikocredit – social investing over 40 years
Social investing might only just be starting to take off in the UK, but it has a long history. Some of the earliest known pioneers were philanthropists, intent on helping people into trade and out of poverty and charitable hand-outs. During the 20th century, most social investors were faith-based organisations, innovating to expand their social missions.
Such were the beginnings of Oikocredit, born amidst the political unrest of the 1970s. The cooperative was initiated by the World Council of Churches who wanted a socially responsible investment channel that would enable organisations and individuals to invest their money for positive development – an idea that was radical for its time. From these early roots, Oikocredit has become one of the oldest and largest sources of social investment in the world, although it remains relatively young in the UK and Ireland.
Today, Oikocredit continues to dedicate itself to providing wide-ranging financial and technical support for improving the livelihoods of people and communities in developing countries. Oikocredit lends to more than 800 partner organisations in over 60 countries. Its mission is to reach financially-excluded people and support them in building their own businesses and sustaining their families and communities. In 2014, 28 million people were reached by Oikocredit’s fair trade, social enterprise, microfinance and renewable energy partners. Its UK partners include leading Fairtrade brands Divine Chocolate, Cafédirect, People Tree and Twin Trading.
Oikocredit Director, Albert Hofsink, who retires in 2015 after twenty years with the cooperative, summarises this rapidly changing landscape for social investment and Oikocredit as being particularly noticeable over the past ten years. He says of the shift: “from then on we went from being a pioneer that was founded by the World Council of Churches to a larger organization with a social approach.”
Indeed, over its 40 year history Oikocredit has disbursed over € 2.1 billion of development financing raised from investors – over half being disbursed in the last 5 years. For the year ended 2014, Oikocredit continued to deliver to its strengths, whilst diversifying into new areas of social investment and reaching ever more remote communities and women. It reported €907m of assets under management and its 53,000 worldwide institutional and individual investors generated a development finance portfolio worth €735m.
More information about getting involved with the cooperative, investing, or becoming a member can be obtained from Oikocredit UK and Ireland.
website: www.oikocredit.org.uk
tel: +44 (0) 1995 602 806
email: [email protected]
Monica Middleton joined Oikocredit in 2014 as National Director, UK and Ireland.
References
Ethex 2014; UK Cabinet Office and Big Society Capital 2014
Aburdene, P. Megatrends: The rise of conscious capitalism
City of London Economic Development, April 2014
Ethex Positive Investment 2014, Nesta 2011, UK Cabinet Office/SIIT 2014, the World Economic Forum 2014.