Welcome to Project Heather
We’re bringing impact to global capital markets to create access, visibility and liquidity for all, with a Scottish Stock Exchange.
The 21st century’s global environmental and social challenges are complex and urgent.
Response at a macro level has seen constructive calls to action. Take the recent Intergovernmental Panel on Climate Change Report indicating we have only 11 years to radically change our ways if climate catastrophe is to be avoided.
Perhaps the most recognised are the United Nations’ Sustainable Development Goals (SDG), set out in 2015, which call for global attention to enduring issues such as lack of access to education, hunger, ill-health, conflict, and gender and wealth inequality.
Private sector transformation
Social and environmental issues have traditionally been the domain of governments and philanthropy. A change has been seen this century with a gradual transformation in the private sector’s outlook. There’s been a plethora of activity and discussion around the trends, alliances and agreements on what it means to be aligned with impact.
Impact investing has evolved rapidly since the term was coined by the Rockefeller Foundation in 2007. Impact investments are those ‘made with the intention to generate positive, measurable social and environmental impact alongside a financial return’ — in contrast with ESG investing. This will mean impact is an end in itself, rather than a means to financial ends.
The emergence of brand certifications such as B Corps reflects a global demand for a more conscious consumerism. Deloitte’s 2018 report, ‘The Rise of the Social Enterprise’ found that businesses are increasingly living by a new paradigm, in which they consider themselves ‘less as a “company” and more as an “institution,” integrated into the social fabric of society.’
The United Nations Global Compact was the first effort by the UN to bring business into the SDG fray, and currently has nearly 10,000 signatures. The steady rise of Environmental, Social and Governance (ESG) investing reflects a growing appreciation in the investment world that certain ‘externalities’ previously considered irrelevant to risk and return, in fact do affect financial performance.
The value of the impact-investing sector roughly doubled last year, reaching US$228 billion according to the GIIN Annual Impact Investor Survey 2018. This report also shows that the vast majority of impact investments met expectations for both financial as well as impact returns.
In summary, impact investing is going mainstream. Priorities are changing, and the private sector is rapidly catching up. And yet, while incubators, accelerators and venture capitalists tap into impact-driven entrepreneurs, public markets have lagged behind. There remains no Regulated Investment Exchange solely committed to these evolving 21st century values, where value is about more than just financial returns. Until now.
Impact Investing in Capital Markets
However, it remains almost exclusively in private equity. Existing organisations such as Canada’s SVC, Brazil’s BVSA and Singapore’s IIX, to some degree bring impact investing into a public exchange model. However, as a recent Principles for Responsible Investment (PRI) discussion paper stated, existing ‘stock exchanges are still transitioning from private placement platforms to fully-fledged public stock exchanges.’
The first impact-focused recognised investment exchange
A Scottish Stock Exchange will be the first Recognised Investment Exchange worldwide for which companies will have to evidence their positive social and/or environmental impact (and improvement targets) before listing, with an annually updated impact report publicly available on their website. With our technological partnership with Euronext now confirmed, we hope, subject to approval from the Financial Conduct Authority (‘FCA’), to be the first exchange with such strong support from established financial institutions and regulatory bodies while simultaneously rigorously applying an impact-lens.
A Stock Exchange for the 21st century
Our mission is to create a destination to further mainstream impact investing and transform global capital markets: to realign drive for profit with one of purpose so we can address pressing global challenges together, and build a fundamentally more inclusive and sustainable world.
By adding much needed ‘impact’ to the traditional capital markets’ risk and reward model, the exchange will be a bridge between the rapidly-rising numbers of impact-driven companies and values-aligned investors.
This will go beyond the existing ESG framework. We will encourage issuers to create their own narrative toward a theory of change and publish an audited annual impact report, approved by an independent impact panel. A Scottish Stock Exchange will be an important interlocutor around how impact is actually measured.
A new community of stewardship
A Scottish Stock Exchange, along with an investment-readiness support programme, will provide a destination for impact-entrepreneurs and values-aligned investors. By listing on the platform, companies will improve visibility and access to funding, helping them grow their business while remaining tenaciously loyal to its impact mission. Retail and institutional investors can join this trusted community to provide stewardship and receive access to change-maker companies, ranging from zero on-road emission vehicles to innovative medicines to natural biotech crop protection.
The Project Heather team, led by financier and entrepreneur Tomas Carruthers, who is well known in both capital markets and impact segments, is unashamedly ambitious in their aim to transform capital markets towards fundamentally different priorities.
Upon FCA approval, Project Heather aims to bring a Scottish Stock Exchange live in the second half of 2019.
Help us to raise good businesses
Are you a senior lawyer or accountant involved in corporate work? Are you an investor or executive of a business organisation? Are you a thought-leader in investment, impact or sustainability? Would you like to become part of the community reforming capital markets in Scotland and beyond?
Reach out to learn more, and sign up to our mailing list.
Questions? Check out our website, read our Early Background Research report or reach out to the team at contact@projectheather.scot.
