APSIS 2021: Impact investment comes of age
 
Mar 28, 2021
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Awareness of social innovation and commitment in Taiwan is continuously improving. Read about how social innovation-minded firms implement the SDGs while exploring opportunities for local and regional investment.

The 2021 Asia Pacific Social Innovation Summit is taking place April 10-11 at the Hilton Taipei Sinban Hotel. Themed “Invest Asia: Building A Sustainable Resilient Future,” the event is a must for those looking to learn more about how social innovation-minded firms implement the U.N. Sustainable Development Goals while exploring opportunities for local and regional investment.

Investment anchors the theme as it links back to the SDGs set by the U.N. in 2015. A clear consensus was reached at the time:

Human beings ought not and will not pursue short-term gains at the expense of long-term benefits.

There are many ways to promote sustainability, and many social innovation organizations with a strong sense of commitment have already created various innovative and practical solutions. The greatest challenge, however, lies in how to sustain the solutions. Impact investment – with its focus on of sustainable development – is one of the ways in which social innovation organizations can keep contributing.

Impact investment aims to generate positive influence and financial gains by investing funds in a specific environmental or social mission.

This may take the form of various asset classes, ranging from stocks to bonds and others. The crucial point is the requirement to generate financial gains, or at least to recoup the investment. This is the key difference between impact investment and traditional charitable donations.

According to a social investment report by the Asian Venture Philanthropy Network in 2019, awareness of social innovation and commitment in Taiwan is continuously improving. Advantages such as widespread digital insfrastructure, mature human capital and good donation habits make Taiwan a potential-laden market for impact investment.

Taiwan’s Social Enterprise Revolving Trust is a noteworthy case. In 2015, private individuals in Taiwan initiated SERT to assist the development of social innovation organizations through specific investments and network connections. As of 2020, more than NT$13 million (US$455,727) has been invested, benefiting a total of 19 social innovation organizations. These include One-Forty, dedidated to assisting Southeast Asian migrants and workers self-cultivate, and Social Enterprise Insights, the largest social enterprise media in the ethnic Chinese world.

Over the past few years, Taiwan’s government has continuously worked to make the social innovation ecosystem more comprehensive, thereby expanding the foundation for impact investment. In 2018, the Social Innovation Action Plan was launched to better coordinate the efforts of various government agencies. This provided the most complete support for social innovation organizations through policy linkage in aspects like international connections, regulatory reform and value adding.

Furthermore, in view of the fact that the SDGs have long been the focus of listed companies’ corporate governance, the Financial Supervisory Commission has initiated a three-year Corporate Governance 3.0-Sustainable Development Blueprint starting 2021.

The plan strengthens the environmental, social and governance accountability of enterprises, as well as emphasizes the promotion of related products such as sustainable development bonds, social responsibility bonds and green bonds. It also guides capital investment into sustainable development under market mechanism.

At this year’s summit, attendees will see firsthand Taiwan’s impact development progress. VIPs including Jeffrey Sachs, chairman of the U.N. Sustainable Development Solutions Network, and Cliff Prior, CEO of The Global Steering Group for Impact Investment, will also share their insights into the current status of impact investment around the world.

Given COVID-19 management considerations, the summit will be an integration of virtual and physical activities. Those physically attending can interact on the spot and review video recordings afterwards, while those unable to visit Taiwan can participate via livestreaming.

For investors, impact investment is a kind of “patient capital.” It is often necessary to provide other services to the investment target, in addition to funds. Lengthy investment periods and meager short-term returns are hardly alluring, but this is the all hands on deck approach required to achieve the SDGs. In sowing the seeds today, next generations will reap the rewards of an entire forest tomorrow. Everyone is urged to join the Asia Pacific Social Innovation Summit and demonstrate Taiwan Can Help create a greater impact for sustainable development.

Photo Source: Audrey Tang

About the author:

Audrey Tang is Taiwan's first Digital Minister. She plays a key role in combating foreign disinformation campaigns & in formulating Taiwan's COVID-19 digital response. She is one of the key people championing the Taiwan Model.