Building the Ecosystem for Impact Investing Why It Matters P. Ming Wong Hong Kong November 4, 2014

About Asia Community Ventures Independent Hong Kong-registered charity incorporated in September Mission  To help entrepreneurs build and scale social businesses that improve the livelihood of vulnerable communities in healthcare, education and environment. Core Programs  Research on ecosystem building, policy innovation and impact investing  Incubation services for entrepreneurs and their social startups  Advisory services for philanthropic funders

Major Projects Completed Encourage Enabling Role of Government  Organized and hosted Impact Investing Forum 2013: Accelerating the Industry Regionally. 350 participants from 10 Asian countries - March  Administered, on behalf of the Rockefeller Foundation, a US$400,000 Impact Economy Innovations Grant Fund for intermediaries. 40 applications from 9 Asian countries – April to November 2013.

Report #1: EngageHK 1. Map Hong Kong’s social ecosystem 2. Identify stakeholders’ needs & priorities 3. Propose ways forward for Hong Kong Objectives

EngageHK - The Seven Sub-Sectors

EngageHK: Key Recommendations Encourage Enabling Role of Government

What is Impact Investing? Source: G8 Task Force on Social Impact Investing … much more than just investing in social enterprises.

Why Impact Investing?  De-risk social innovation  Crowd-in private sector support  Attract new capital to grow social ecosystem  Leverage business approaches and impact measurement tools  Recycle capital for future investments

Social Impact Investment Taskforce Report

Summary Objectives for Policymakers Government has three important roles:  Market Builder  Increase resources and support for impact-driven organizations  Increase flow of talent  Develop impact investment culture with a range of intermediaries  Encourage new investors to enter social impact investment  Market Participant  Increase effectiveness as purchaser of social outcomes  Increase investment from mainstream investors  Market Steward  Design appropriate regulatory & legal framework for impact driven organizations  Reduce legal & regulatory barriers for impact investors

G8 National Advisory Board Reports UK USA Japan France Australia Italy Canada Germany

Report #2: Adopting the London Principles 1. Analyze Hong Kong’s social funds 2. Introduce the London Principles 3. Propose policy innovations for Hong Kong Objectives

Observations on Existing Social Funds  Different Approaches, Rather Disconnected  Variations of Government Social Subventions  Lacks Intentionality for Sustainability and Scalability  Our HK$500 million Social Innovation & Entrepreneurship Development (“SEI”) Fund has potential to address these gaps and be different from existing funds.

The London Principles of Impact Investing Preamble … a set of guidelines intended to assist governments considering impact investing as a tool to address social objectives, … offer guideposts that ideally point to better strategy and policy development, … are drawn from a multitude of political, economic, and cultural contexts. … support a reflective approach that drives learning and innovation.

Summary Recommendations for Policymakers  Clarity of Purpose  Create an impact investing agenda  Establish an Office of Social Innovation  Conduct needs-based assessment of social funds as linked to longer-term social issues  Stakeholder Engagement  Provide a public platform for impact investing policy review  Provide incentives to foster an enabling environment for impact investing and social innovation  Engage with global impact investing community  Market Stewardship  Demand-side through partnerships  Supply-side through further research initiatives  Intermediary development via targeted funding at scale  Policy and legal infrastructure

Summary Recommendations for Policymakers  Institutional Capacity  Review departmental and policy focus to be responsive to addressing structural social challenges  Commission internal review of existing institutional capacities and policies  Universal Transparency  Funder – support ideas and initiatives addressing structural issues  Regulator – foster policy transparency and reliability  Enabler – leverage on open data approaches to spur social innovation via technology

About Giinseng  Learning by Doing  Engage with Social Entrepreneurs  Invest in Social Businesses  Crowd Funding

Going Forward  Impact investing is moving into the mainstream and will be a potent force for social good to supplement government funding.  Creating an ecosystem to promote social innovation and impact investing is the way forward.. Photo Credit: Eddie Kwong/WMA Open Photo Contest 2013

One More Thing Photo Credit: Dale de la Ray/AFP/ Getty Images