11.05.07

Ethical enterprises…. Ethical investors

Posted in exchanges, product at 6:09 pm by Andrea McGrath

One of the goals of a social stock exchange would be to facilitate capital flow to a wider number and variety of social enterprises - including those that are too small for regulated exchanges, those who may not yet be on the “radar screen” of circles of social investors (angels, those advising philanthropic portfolios, etc, etc..), and those who are ready to move beyond their initial angel financing and really start to grow!   

However, I read an interesting quote that reminded me of another key value - outside of increased access to capital - that a social stock exchange would/could provide to social enterprises. And that is access to “principled” investors. This is not at all to say those of us investing in traditional stocks are unprincipled - but rather than the development of a social stock exchange - if handled properly - could actually help attract investors who would support the ethical and/or mission minded operating principles and practices of social enterprises, rather than try to modify them to - say - increase short term returns…. 

The quote is from Mark Constantine - the founder and owner of Lush - a beauty products company that does not test on animals, uses minimal packaging, etc.. among other ethical business practices. He recently spoke with the Financial Times about the life and passions of Anita Roddick - founder and owner of the Body Shop who recently passed away. Lush has 500 stores currently (luckily one in my neighborhood in Boston) and he would like to open another 500. While he works on business challenges - he is frustrated with the capital challenges. He would like to broaden the ownership of Lush shares, but - as he tells the FT - “he is extremely nervous of the stock market, which he believes can force ethical businesses to abandon or water down their principles…. “Maybe what we need is another kind of stock market where [ethical] companies can trade and it’s understood they will abide by certain [rules] above others.”  Agreed!  I’d recommend reading the entire article (here) - including Mark’s advice for aspiring ethical entrepreneurs. His last point is that “conventional wisdom is often wrong!” These ideas around social stock exchanges - and developments within the “social capital markets” writ large - are both challenging conventional wisdom around ‘investing and philanthropy” - and incorporating some of their best attributes! Join the conversation.   

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