Thursday, January 31, 2013

Cost, Value and social metrics

“What is a cynic? A man who knows the price of everything and the value of nothing.And a sentimentalist, my dear Darlington, is a man who sees an absurd value in everything, and doesn't know the market place of any single thing.”

Oscar Wilde’s oft quoted lines came to mind when I was listening to today’s Social Finance Connects webinar on Social Metrics, Outcome Evaluation and Social Return on Investment. We heard from Stephanie Robertson of the SiMPACT Strategy Group and Tessa Hebb of Carleton University’s 3ci program, both of whom have authored reports on social metrics.

Ms. Robertson began by stressing that social impacts happen in all sectors – for profit companies, not for profits, government agencies. This is an important point to note as much current discussion focuses on impact investing, particularly social impact bonds, but measuring social and environmental return is extremely important to SRI investors owning publicly traded corporations.

“In the experience of the author, social metrics are measures of activity, outputs, outcome and
impact. They can be used in relation to anything that is ‘social’ in nature. They can be applied to activities well beyond the scope of the non‐profit sector (i.e. public, private, and coproduction activities). Every organization in every sector might use social metrics to plan,
measure and evaluate organizational performance as well as to plan, measure and evaluate the impact of operations and corporate decision‐making upon third parties.”

She went on to discuss the need to streamline terminology so that all sectors could use consistent social metrics, and all could contribute to the dialogue as it develops. The more complex questions are not about the cost of inputs and outputs, but the value of outcomes and impacts. One of the goals of SROI is to help move the conversation from ‘cost’ to ‘value’.

Due to time constraints, Ms. Robertson finished up quickly, but her report can be read here.

Next up was Tessa Hebb presenting the 3ci survey on social metrics. The survey was completed in 2011 and Ms. Hebb noted that many changes have occurred in the past 24 months. The survey looked at understanding social metrics, which social metrics tools are being used, common barriers to using social metrics, stakeholders in the process and standardisation and the role of government in social metrics development. In Canada, we are considering a wide variety of social metrics. In addition to SROI, some of the other metrics mentioned by interviewees in the report were Asset Mapping, GIIRS, Google Analytics, IRIS and Sustainability Reporting. Ms. Hebb pointed out that the respondents were split on whether social metrics should be standardised. Much comment was generated during the webinar on this subject. It appeared that people were in favour of standardised terminology, but wanted to retain flexibility to create customized metrics for their organization.

Ultimately, we want to use social metrics to help us tell a story, and we must be wary of Oscar Wilde’s cynics who will focus only on the numbers generated by social metrics tools.

For more information on social metrics, check out SROI Canada, Social Finance and the Carleton 3ci site.

Monday, January 28, 2013

First-Time Measure of Global SRI Assets: $13.6 Trillion

A new first-of-its-kind report on the global sustainable investment industry reveals US$13.6 trillion in assets incorporating environmental, social and governance (ESG) concerns into the investment process.

The Global Sustainable Investment Alliance released its debut report today, including results from regional studies in Canada, the United States, Europe, Australia, Japan, Asia and Africa.

The report measures sustainable investments in all asset classes, from public equities and fixed income to hedge funds and microfinance.

The sustainable investment assets represent 21.8% of the total assets managed professionally in the regions covered by the report, “conclusively showing that the sustainable investment industry has significant scale in the global arena,” the alliance said in a news release.

Europe represents about 65% of global sustainable investment assets, the largest region. Europe, along with the United States and Canada, account for 96% of world SRI assets.

The most commonly used strategy among sustainable investment asset managers is negative/exclusionary screening, followed by ESG integration and corporate engagement/shareholder action.

The Global Sustainable Investment Review 2012 is the first collaborative report of its kind, and we are delighted to be part of it,” said Gary Hawton, President of the Social Investment Organization (SIO). “Sustainable and socially responsible investment has truly become a global industry and it has never been more relevant. The accessibility of this information in a global format will further build our understanding of the trends and growth in the industry.”

The report’s release also launches the Global Sustainable Investment Alliance and its website at, a collaboration of the seven largest sustainable investment membership organizations in the world.


Thursday, January 17, 2013

Canadian SRI Assets Top $600 Billion

A new report by the Social Investment Organization shows that socially responsible investment assets in Canada rose to $600.9 billion as of the end of 2011, a 16% rise since the SIO’s last industry survey in 2010.

SRI in Canada now commands one-fifth of assets under management in the financial industry, showing a small rise from 2010 when it was 19% of the market.

"While SRI is showing that it is recovering alongside traditional investments, we believe that there is still a great deal of potential growth yet to be realized," the SIO says in the report. 

Pension fund assets accounted for $533 billion, or 89% if the total while asset management firms investing funds under SRI mandates represented about $48 billion or 8% of the total. Retail investment funds totalled $13.5 billion, about 2% of the market.

“Consistent with the findings of this report, we see steady growth in interest about responsible investment among Canadian clients and investment managers,” says Jane Ambachtsheer, a Partner with Mercer. “We expect to see more discussion of instances where environmental, social and governance inputs improve risk-adjusted returns. We encourage managers to pro-actively share such examples, as is happening in the major financial markets around the world.”

For more details, the SIO has posted its news release and the report on its recently revamped web site.