Social stock exchange being considered

The Asian Development Bank (ADB), Thammasat University, the Population and Community Development Association (PDA), and the Global Exchange for Social Investment (GEXSI) are studying the feasibility of establishing a social equity market to help underprivileged communities.

The social stock exchange (SSE) would list any company, foundation or individuals that make contributions to social projects, in order to help them raise funds.

The exchange would boost corporate and individual social responsibility, according to Mechai Viravaidya, the former senator who is the chairman and co-founder of the PDA. Brazil has had a Social Investment Stock Exchange for four years via its key stock bourse - Bovespa - which seeks to boost corporate social responsibility. Bovespa set up a foundation and listed all firms on its exchange that made social contributions, Maritta Koch-Weser from GEXSI said.

Tanatat Puttasuwan, the PDA's special adviser and director for corporate social responsibility and international affairs, said the social stock exchange was a new idea, utilising the Stock Exchange of Thailand as a channel.

Mechai said the four organisations would study listing criteria and meet again over the next three months.

According to GEXSI, the "social stock market" would target pockets of people with the lowest incomes around the world. Its goal is to build a larger, supportive market for economically viable (for profit) "social businesses".

The project builds on small ground-breaking philanthropic social stock exchange schemes in Brazil and South Africa, plus exploratory work toward a commercial London Social Stock Exchange for the United Kingdom, and on formidable online social investment platforms, such as Greater Good, Kiva and Global Giving.

The investment focus is on businesses among the poorest that tend to start small. Most originate in remote areas, at village level, or in urban slums. Most business proponents have strong leadership qualities and commitment, but often only poor schooling.

To succeed, they need advice, help to develop realistic and detailed business plans, coaching, and assistance with market access, GEXSI said.

Social business is seen as a way to lift poor people out of poverty within a generation.