Special Issue "Social Impact Investments for a Sustainable Welfare State"

A special issue of Sustainability (ISSN 2071-1050).

Deadline for manuscript submissions: closed (30 April 2019).

Special Issue Editors

Dr. Helen Chiappini

Guest Editor
Department of Management and Business Administration, G. d’Annunzio University of Chieti-Pescara, Viale Pindaro 42, 65127 Pescara, Italy
Interests: social impact investment funds; banking sustainability; microfinance; intellectual capital; non-performing loans; governance of financial institutions
Special Issues and Collections in MDPI journals
Prof. Mario La Torre
Website
Guest Editor
Department of Management, University of Rome “La Sapienza”, Via del Castro Laurenziano 9, 00185 Roma, Italy
Interests: social impact investments; microfinance; financial innovation; asset securitization; financing of cultural and audiovisual industry.
Prof. Dr. Gianfranco A. Vento
Website
Guest Editor
Centre For Banking and Finance, Regent’s University London, Inner Circle, NW1 4NS, London, UK; Guglielmo Marconi University, Rome, Italy
Interests: Microfinance; socially responsible investments; financial institutions; banking regulation; credit guarantee institutions and SME financing; emerging markets
Prof. Dr. Giuliana Birindelli
Website
Guest Editor
Department of Management and Business Administration, G. d’Annunzio University of Chieti-Pescara, Viale Pindaro 42, 65127 Pescara, Italy
Interests: environmental performance in banks; corporate social responsibility in financial industry; intellectual capital; corporate governance of banks; credit risk; operational risk management; compliance risk

Special Issue Information

Dear Colleagues,

Social Impact Investments have gained the interest of many financial institutions and policy-makers due to the role that they can play in the achievement of a measurable social impact for the involved communities, and a financial return for interested investors. Specifically, social impact investment could play a huge role in the financing of currently unsatisfied social needs, promoting a sustainable welfare state. Many scholars have recognized that the literature on social impact investments is not properly developed and some areas of research have remained under-explored over the years.

This Special Issue aims to extend the current knowledge on social impact investments, with particular reference to the financial structures of impact investments and to the link between social impact investments and a sustainable welfare state. Conceptual and empirical papers are invited from scholars, policy makers, and professionals dealing with various finance, economic, business and management aspects of social impact investments. The selected papers will contribute to the evolving literature, as well as provide new directions for research on the topic of social impact investments.

Interested contributors can present their working papers at the 2nd Social Impact Investment International Conference that will we held in Rome on 13 December 2018. Attendance at this conference is recommended, but is not a prerequisite for submission to the Special Issue.

Dr. Helen Chiappini
Prof. Mario La Torre
Prof. Dr. Gianfranco A. Vento
Prof. Dr. Giuliana Birindelli
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Sustainable finance
  • Sustainable finance versus social impact investments
  • Social impact investments and a sustainable welfare state
  • Social impact investments and a sustainable public dept
  • Social impact investments and sustainable EU policies
  • The role of banking institutions
  • The role of institutional investors
  • The role of public institutions
  • Financial structures of social impact investments
  • Social impact bonds
  • Social impact investment funds
  • Governance of social impact investments
  • Sustainable finance and millennials
  • Social impact investments and gender
  • Measurement and measurability of social impact investments

Published Papers (8 papers)

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Research

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Open AccessArticle
Assessment of the Economic and Social Impact Using SROI: An Application to Sport Companies
Sustainability 2019, 11(13), 3612; https://doi.org/10.3390/su11133612 - 01 Jul 2019
Cited by 3
Abstract
This paper evaluates the social impact of a football club and its philanthropic organization on the local community and its stakeholders, namely supporters, sponsors, players, and shopkeepers. The methodology used is the Social Return on Investment (SROI). SROI methodology includes all the beneficiaries [...] Read more.
This paper evaluates the social impact of a football club and its philanthropic organization on the local community and its stakeholders, namely supporters, sponsors, players, and shopkeepers. The methodology used is the Social Return on Investment (SROI). SROI methodology includes all the beneficiaries that are beyond the scope of the company’s accounting and its fiscal and financial statements. The aim is to assess both the benefits and the negative impacts of a company’s activities on stakeholders. This type of analysis combines the use of qualitative, quantitative and financial information gathered and analyzes them in order to estimate the amount of “value”, including mental health and well-being, created or destroyed by a business activity, by a project or by the overall operation of an organization. The sport club under review in the present analysis is called Virtus Entella, an Italian football club playing in the second division. An SROI indicator was applied in reference to the business activity that took place during the championship season 2017/2018. Results show that the social impact created during the championship amounts to approximately 44 million Euro against a financial investment of 15 million Euro, producing an SROI ratio of 2.98:1. This outcome suggests that for every euro invested by the football club, about 3 Euros of social value is created. Full article
(This article belongs to the Special Issue Social Impact Investments for a Sustainable Welfare State)
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Open AccessArticle
Foundations of Banking Origin and Social Rating Philosophy—A New Proposal for an Evaluation System
Sustainability 2019, 11(13), 3518; https://doi.org/10.3390/su11133518 - 27 Jun 2019
Cited by 1
Abstract
Social impact investments represent a cultural revolution, as they offer the opportunity to pursue financial and social goals simultaneously. However, Social impact investing market configurations are not evolving equally across national contexts. Therefore, in different contexts, different actors may play the pivotal role [...] Read more.
Social impact investments represent a cultural revolution, as they offer the opportunity to pursue financial and social goals simultaneously. However, Social impact investing market configurations are not evolving equally across national contexts. Therefore, in different contexts, different actors may play the pivotal role to make social impact investments more attractive. The present work, by looking at the Italian context, applies a qualitative methodology to study Foundations of Banking Origin (FBOs). This is a specific category of foundation which is bound by law to work and expand the charity sector. It emerges that the role of these entities, inside the philanthropy system, should develop from “impact facilitators” to “impact generators” in promoting social initiatives. Furthermore, the work sustains the importance of introducing a social impact rating system as a formalized methodology to select and finance the worthiest social project. In this perspective, the definition of a clear social rating philosophy and its correct application in the rating system design and use is a necessary condition to increase the solidity of a social impact assessment model. Full article
(This article belongs to the Special Issue Social Impact Investments for a Sustainable Welfare State)
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Open AccessArticle
Responsible or Thematic? The True Nature of Sustainability-Themed Mutual Funds
Sustainability 2019, 11(12), 3304; https://doi.org/10.3390/su11123304 - 15 Jun 2019
Cited by 3
Abstract
The aim of the paper is to compare the risk-adjusted performance of sustainability-themed funds with other categories of mutual funds: sustainable and responsible mutual funds that implement different approaches in portfolio selection and management, and thematic funds not committed to responsible investments. The [...] Read more.
The aim of the paper is to compare the risk-adjusted performance of sustainability-themed funds with other categories of mutual funds: sustainable and responsible mutual funds that implement different approaches in portfolio selection and management, and thematic funds not committed to responsible investments. The study analyses a sample of about 1000 European mutual open-end funds where 302 are sustainability-themed funds, 358 are other responsible funds, and 341 other thematic funds. Risk-adjusted performance is analyzed for the period 2007–2017 using different methodologies: a single factor Capital Asset Pricing Model (CAPM), a Fama and French (1993) 3-factor model, and a Fama and French (2015) 5-factor model. Our main findings demonstrate that the risk-adjusted performance of ST funds is more closely related to their responsible nature than to their thematic approach. Sustainability-themed mutual funds are more similar to other socially responsible funds than to other thematic funds, as confirmed by performance analysis over time. They are also better than other thematic funds in overcoming financially turbulent periods and currently benefit from SRI regulation and disclosure. Full article
(This article belongs to the Special Issue Social Impact Investments for a Sustainable Welfare State)
Open AccessArticle
Macro Asset Allocation with Social Impact Investments
Sustainability 2019, 11(11), 3140; https://doi.org/10.3390/su11113140 - 04 Jun 2019
Cited by 1
Abstract
Using a unique dataset of 50 listed companies that meet the majority of the OECD requirements for social impact investments, we construct a social impact finance stock index and investigate how investing in social impact firms can contribute to portfolio risk-return performance. We [...] Read more.
Using a unique dataset of 50 listed companies that meet the majority of the OECD requirements for social impact investments, we construct a social impact finance stock index and investigate how investing in social impact firms can contribute to portfolio risk-return performance. We build portfolios with three different methodologies (naïve, Markowitz mean-variance optimization, GARCH-copula model), and we study the performance in terms of returns, Sharpe ratio, utility, and forecast premium based on a constant relative risk aversion function for investors with different levels of risk aversion. Consistent with the idea that social impact investment can improve portfolio risk-return performance, the results of our macro asset allocation analysis show the importance of a large fraction of investor portfolios’ stake committed to social impact investments. Full article
(This article belongs to the Special Issue Social Impact Investments for a Sustainable Welfare State)
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Open AccessArticle
Social Impact Bonds for a Sustainable Welfare State: The Role of Enabling Factors
Sustainability 2019, 11(10), 2884; https://doi.org/10.3390/su11102884 - 21 May 2019
Cited by 4
Abstract
The financial crisis has put pressure on governments throughout the world to reduce deficits with severe budgetary cuts in many welfare areas by reinforcing the need to modernize social policies and optimize their effectiveness and efficiency. Social impact bonds (SIBs) have rapidly become [...] Read more.
The financial crisis has put pressure on governments throughout the world to reduce deficits with severe budgetary cuts in many welfare areas by reinforcing the need to modernize social policies and optimize their effectiveness and efficiency. Social impact bonds (SIBs) have rapidly become one of the most innovative financial schemes used by governments to privatize the upfront costs of welfare interventions by reducing taxpayer expenditure. Our analysis focuses on healthcare impact bonds (HIBs) that correspond to the adaptation of SIBs to health programs and are considered to be a viable way to fund out-of-pocket and preventive programs, especially considering the recent cuts to public healthcare expenditure. By using an in-depth qualitative analysis of existing practices based on a multiple case study approach, this study contributes to the ongoing debate on the role of SIBs for the future sustainability of welfare systems by proposing reflections and indications for the scalability and replicability of SIBs. With respect to the existing literature, this paper provides a theorization of the main scaling ingredients to be considered for the development of the SIB market as a supporting financial approach for new and emerging welfare needs by also proposing suggestions and insights and serving as a guide for scholars and practitioners. Full article
(This article belongs to the Special Issue Social Impact Investments for a Sustainable Welfare State)
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Open AccessArticle
Fiscal Decentralization, Local Competitions and Sustainability of Medical Insurance Funds: Evidence from China
Sustainability 2019, 11(8), 2437; https://doi.org/10.3390/su11082437 - 24 Apr 2019
Cited by 2
Abstract
Local governments are responsible for the management of social medical insurance for urban and rural residents in China. Under the background of fiscal decentralization between the central government and local governments, the strengthening of supervision on medical insurance funds by local governments leads [...] Read more.
Local governments are responsible for the management of social medical insurance for urban and rural residents in China. Under the background of fiscal decentralization between the central government and local governments, the strengthening of supervision on medical insurance funds by local governments leads to a reduction in the expenditure of the medical insurance fund, which contributes to its sustainability. By employing the provincial level panel data during 2004–2014, we used a fixed effect model and a spatial autoregression model to investigate whether fiscal decentralization has had a negative influence on the expenditure of China’s new rural cooperative medical system (NCMS) fund. We found that fiscal decentralization has had a significant influence over its per capita expenditure. Our results also indicate that higher fiscal decentralization leads to higher financial aid in the NCMS provided by local governments. Additionally, the expenditure of the NCMS and the local financial aid are influenced by nearby governments. Our results suggest that appropriate fiscal decentralization, which helps to maintain the sustainability of social medical insurance funds, should be encouraged. Full article
(This article belongs to the Special Issue Social Impact Investments for a Sustainable Welfare State)
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Open AccessArticle
The Green Bonds Premium Puzzle: The Role of Issuer Characteristics and Third-Party Verification
Sustainability 2019, 11(4), 1098; https://doi.org/10.3390/su11041098 - 19 Feb 2019
Cited by 11
Abstract
If we examine the characteristics of a sample of green bonds matched with their closest brown bond neighbors, we encounter a challenge. Green bonds have higher yields, lower variance, and are more liquid. The institutional/private issuer and the green third-party verification/non-verification breakdowns help [...] Read more.
If we examine the characteristics of a sample of green bonds matched with their closest brown bond neighbors, we encounter a challenge. Green bonds have higher yields, lower variance, and are more liquid. The institutional/private issuer and the green third-party verification/non-verification breakdowns help explain this puzzle. Green bonds from institutional issuers have higher liquidity with respect to their brown bond correspondents and negative premia before correcting for their lower volatility. Green bonds from private issuers have much less favorable characteristics in terms of liquidity and volatility but have positive premia with respect to their brown correspondents, unless the private issuer commits to certify the “greenness” of the bond. An implication of our findings is that the issuer’s reputation or green third-party verifications are essential to reduce informational asymmetries, avoid suspicion of green (bond)-washing, and produce relatively more convenient financing conditions. Full article
(This article belongs to the Special Issue Social Impact Investments for a Sustainable Welfare State)
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Open AccessCase Report
Social Impact Investing for Marginalized Communities in Hong Kong: Cases and Issues
Sustainability 2019, 11(10), 2831; https://doi.org/10.3390/su11102831 - 17 May 2019
Abstract
This paper documents three business cases of social impact investing (SII) for marginalized communities in Hong Kong. Target stakeholders of the cases include displaced old tailors, elderly and wheelchair-bound people, and single-parent families. They are all privately-owned and profit-driven entities with their own [...] Read more.
This paper documents three business cases of social impact investing (SII) for marginalized communities in Hong Kong. Target stakeholders of the cases include displaced old tailors, elderly and wheelchair-bound people, and single-parent families. They are all privately-owned and profit-driven entities with their own social missions. Information on the cases is collected from structured interviews and meetings with their founders and stakeholders. The paper further discusses general issues of SII in Hong Kong and possible mechanisms to support SII development. Tax exemption for investors and donors, related government subsidy schemes, certification on social impacts, and establishment of social impact funds would help SII business thrive in the future. Full article
(This article belongs to the Special Issue Social Impact Investments for a Sustainable Welfare State)
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