Transforming Finance: The Evolution and Power of Social Stock Exchanges
financialexpress.comIn the landscape of finance, a radical shift is ongoing, it challenges the traditional investment landscape for financial gains. This transformation is vainly guarded by Social Stock Exchanges (SSEs); it prioritizes investing in social and environmental causes along with monetary returns. As the world is facing numerous challenges, climate change, poverty, social injustice, and inequality, SSEs provide an opportunity for investors to align financial objectives with societal development.
Traditionally, Shareholders’ wealth maximization is the primary objective of stock exchanges, reflecting the barbican of financial capitalism. However, as global scenarios are changing, investors now want to leverage their capital for socially responsible investing. SSEs bestow a platform to give dual benefits of financial returns and social outcomes. A marketplace for trading securities is provided where investors are able to support firms that work for social causes. These impact investors understand the power of capital in reshaping this planet for the better, and hence, these investors allocate their capital effectively and efficiently.
The first social stock exchange was introduced in Brazil in the year 2003. Afterwards, many countries initiated these SSEs, like the United Kingdom, South Africa, Canada, Singapore, Portugal, and Jamaica. The concept of SSEs has been introduced in India in the budget speech of Financial Year 2019-20 by the Hon’ble Finance Minister Smt. Nirmala Sitharaman. From registering ‘SGBS Unnati Foundation’ as the first entity under SSE in India to 43 entities on the Bombay Stock Exchange SSE platform and 59 entities in the National Stock Exchange SSE platform as of date.
Securities and Exchange Board (SEBI) of
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