Finland launched its National Impact Investing Task Force at a well-attended, sleek event in Helsinki on 9 December. After having kept a close eye on initiatives like the G8 Social Impact Investment Task Force and its various offshoots for the past several years, Sitra—Finland’s innovation fund, which reports directly to parliament—is leading the group. It includes Pentti Pikkarainen, Director General of Financial Markets Minister of Finance, as well as academics, investors, and representatives from municipalities and the non-profit sector.

This diversity of stakeholders was well-represented among the 160 participants at the launch event, where my talk about the international scene was bookended by Mr. Pikkarainen and one of Finland’s best-known performance artists, the rapper Paleface. When I asked Paleface what his interest in impact investing was, he told me that ‘a shift is needed from a ‘me’ to a ‘we’-centered world view,’ and that ‘impact investments can be a significant part of the shift towards this new paradigm’ before segueing into some thoughts on impact measurement. Amazing to think how his passion and knowledge on the topic might influence Finnish society as a whole, particularly its youth. You can see the clip of Paleface’s interview to get a feel for the event; a beginner’s guide to the beautiful but impenetrable Finnish language may be of use.

Finland’s approach to impact investment, at least in this early stage, relies heavily on social impact bonds (SIBs). As Mika Pyykkö, who leads the impact investing practice at Sitra, told me, ‘people think of Finland as a model welfare state, but, like many countries, we have been facing big public funding challenges since the 2008 financial crash.’ SIBs are being trialed as a way to address social challenges while shifting the funding burden to the private and quasi-private sectors, broadening the accountability for the country’s well-being. As Pyykkö puts it, ‘it is time to build up a new kind of Nordic welfare state.’ Pyykkö calculates that the public sector could save up to €1 Billion per year through prevention of social and health problems by way of SIBs.

Photo: Sitra

The first SIB is already in place and is focused on reducing workplace absenteeism. It is being piloted with a group of 1,300 workers and has an ambitious target of reducing sick leave by 2.1 days per employee per year. It is the first SIB in any of the Nordic countries and is set to be followed by another seven SIBs which are in the detailed planning phases among six Finnish municipalities and one ministry. They stretch from themes of wellbeing of children and families—as measured, for example, by foster care placements—through to integration of immigrants, which, given the Europe-wide asylum-seeker crisis, is sure to be an acute challenge. In the spring of 2016, a three-year pilot SIB will address integration of immigrants in employment. In addition to these eight SIBs either in place or in detailed planning, another eleven are in early-stage consideration. Finland is therefore quickly becoming the country to watch as the closely-knit nation of 5.5 million becomes a hotbed of experimentation for this still relatively young instrument of social innovation.

One of the social entrepreneurs on-hand was Peik Hämekoski, co-founder of Elffe, which matches young amateur musicians with seniors in order to provide company and support, as well as to bridge generational gaps. Hämekoski was excited about the prospect of SIBs and is working out how to include these in Elffe’s financing strategy. He is optimistic that SIBs will ‘bring huge changes and improvements to the way impact organisations operate, measure and deliver results.’

I called Jane Newman of Social Finance in London, the firm that invented the SIB with the Peterborough Social Bond, to ask if she was following Finland’s story. She said she indeed had pegged the country as one to watch, and felt their chances of success were high given the high level of public sector engagement. Her advice was to build SIBs that can act as platforms—that can be scaled and replicated, in order to avoid starting from scratch and requiring a new transaction every time. She also cautioned that that SIBs are not a silver bullets that can solve every type of problem.

You can find more about Sitra’s impact investing leadership in Finland—in English—here.

Ryan Little leads the social finance practice at the BMW Foundation. (@ryanglittle)