Lisbon launches social stock exchange

The Portuguese Social Stock Exchange, a European first, was launched on      2 November in Lisbon by the Gulbenkian Foundation, EDP Foundation and Euronext Lisbon. Modelled on the original social stock exchange initiative launched in Brazil by Bovespa, the São Paulo Stock Exchange, it is designed to boost NGO-supported social and environmental projects.

By analogy with the financial stock market, where corporations strengthen their business through the stock exchange, which turns investors’ capital into profits and dividends, the supported NGOs can become stronger by using the investments they receive to foster a fairer society and a better protected environment.

Recognized by Unesco as a world pioneer and cited as an example of good practice by the UN Global Compact, the Bovespa project was innovative not only in terms of creating new channels through which NGOs can raise funds but also in terms of creating the idea of the social investor and revised notions of stock and profit – developments that will be replicated in the Portuguese version.

The social stock exchange concept seeks to challenge the idea of value as a purely financial concept. While financial returns allow the financial investor an easy way to monitor how their investment is faring, the social investor does not have such a ready index. The social stock exchange aims to provide a clear framework to allow the social investor to see what impact their money has made – the social profit. The aim is that this example of social investments made through a transparent monitoring vehicle will encourage further investment as well as helping to raise awareness among the community of the value of social ventures. It is hoped that the initiative will become financially self-sustaining by the end of 2011.

Thanks to the support of the Gulbenkian Foundation and the EDP Foundation, the initiative is likely to achieve wider visibility in Portugal than it has done in Brazil. Through the support of the Euronext network, it will provide a model for other European stock exchanges and for Euronext members who might adopt it as a common platform for social responsibility.

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