Building the Ecosystem for Impact Investing Why It Matters P. Ming Wong Hong Kong

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

2. About Asia Community Ventures • Independent Hong Kong-registered charity incorporated in September 2012. • 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

3. 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 2013. • 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.

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

5. EngageHK - The Seven Sub-Sectors Social Sector Ecosystem Academia Private Corporations Foundations & Charitable Trusts Intermediaries Non-Profit Organizations Social Enterprises Government

6. EngageHK: Key Recommendations Foster cross-sector dialogue and collaboration Focus on both social and economic benefits Create clearinghouse for ideas and capital Promote greater accountability and transparency Encourage enabling role of government Encourage Enabling Role of Government

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

8. 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

9. Social Impact Investment Taskforce Report

10. 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

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

12. Report #2: Adopting the London Principles Objectives 1. Analyze Hong Kong’s socialfunds • 2. Introduce the London Principles • 3. Propose policyinnovationsfor Hong Kong

13. 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.

14. 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.

15. 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

16. 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

17. About Giinseng • Learning by Doing • Engage with Social Entrepreneurs • Invest in Social Businesses • Crowd Funding

18. 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

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