Social enterprises to be given a slot on the stock market:
COMPANIES THAT earn money doing social good, such as cancer care, crime-prevention, education or faith services, can list on the Jamaica Stock Exchange (JSE), allowing stock market investors to more easily enter and exit such ventures.
The JSE wants to create a JSE Social Exchange platform for social enterprises and is working with a start-up date of mid-2018, according to Deputy General Manager Robin Levy.
A social enterprise listing would probably look no different from existing listings now, Levy said, but investors would need to approach that type of investment by assessing a ‘triple bottom line’ – its impact on people, planet and profit.
“It must make money in order to maintain and to sustain the operations, but it may or may not make a return to investors. And investors, from the onset, would have to know that,” Levy told the Financial Gleaner.
The idea for the JSE Social Exchange was raised at the exchange’s annual capital markets conference last week and again at the two-day Social Enterprise Boost Initiative summit held at the top of this week.
Discussions about the social exchange are already under way, but there is still a lot of work to be done. For example, the question as to what would be the criteria and minimum level of societal good required to become a social enterprise is something the Ministry of Industry, Commerce, Agriculture and Fisheries wants to define.
This definition will be critical in developing the social stock exchange. The ministry, however, is yet to respond to queries on the status of its work.
“The Ministry of Industry is in the path of defining what is a small and micro enterprise, but also a social enterprise. The JSE is also meeting with industry participants to determine concrete definitions, because otherwise a sky-juice man can say he is doing social good and seek to list,” Levy said.
The JSE itself is looking at global examples to determine best practices, and will visit Brazil on a fact-finding mission later this year.
The JSE has been laying the groundwork for the exchange since 2009 – around the same time that it successfully implemented the JSE Junior Exchange.
Social enterprises such as Deaf Can! Coffee, described the social exchange as positive, albeit a move that requires investor education.
“There’s a lot of momentum in the social enterprise sector ,and the exchange can give visibility and recognition to that,” said Blake Widmer, spokesperson for Deaf Can! Coffee.
Deaf Can! operates a café from Cassia Park in Kingston, but also does pop-ups at events and bookshops. It earns revenues by serving quality coffee, but the business is centred around training deaf youngsters as coffee baristas.
“There might be concerns from investors about the return on investment, which might compromise the social aspect of profit, people and planet,” said Widmer. “You’d have to make it clear that it’s not about the proceeds coming to me, the investor, but about reinvesting in the society.”
Widmer says he will assess the viability of listing on the Social Exchange were it to be established, but he was cautious about going public.
“A social enterprise does need to grow, but I do not see us needing to list for the near term,” he said.