managed by A. Kuhlemann
Social Stock Exchanges (SSE) act as a market maker between investors and ecological or social organisations. The innovation is to offer so-called "hybrid investments": products with below-market financial returns in exchange for high measurable ecological and/or social impact.
"Regular" IPOs entail prohibitively high costs compared to the mid-sized financing needs of this kind of organisation; at the same time, investors are faced with a lack of transparency when comparing investment opportunities in different "impact organisations".
Therefore, both sides benefit from the platform offered by the Social Stock Exchange Association:
- Organisations can substantially lower their cost of capital, as they no longer directly negotiate with investors
- Investors benefit from a high level of comparability (i.e. transparency) between the non-financial impact of their investments, previously almost impossible to obtain.