Environmental, Social, and Governance - ESG Funding
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Environmental, Social, and Governance ESG Funding
Environmental, social and corporate governance (ESG) is now one of the most important areas in funding and investment. ESG refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or business.
Funding opportunities for social innovators are incredible important for the world society. If you have a good idea or a good ongoing initiative already, money can follow if you know where to look for.
What Are Environmental, Social, and Governance (ESG) Criteria?
Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
Environmental, social, and governance (ESG) criteria are an increasingly popular way for investors to evaluate companies in which they might want to invest.
Many mutual funds, brokerage firms, and robo-advisors now offer products that employ ESG criteria.
ESG criteria can also help investors avoid companies that might pose a greater financial risk due to their environmental or other practices.
In recent years, as younger investors, in particular, have shown an interest in putting their money where their values are, brokerage firms and mutual fund companies have begun to offer exchange-traded funds (ETFs) and other financial products that follow ESG criteria. Robo-advisors such as Betterment and Wealthfront have also used them to appeal to these investors. According to the most recent report from US SIF Foundation, investors held $11.6 trillion in assets chosen according to ESG criteria at the beginning of 2018, up from $8.1 trillion just two years earlier.
ESG investing is sometimes referred to as sustainable investing, responsible investing, impact investing, or socially responsible investing.
How Environmental, Social, and Governance (ESG) Criteria Work
To assess a company based on environmental, social, and governance (ESG) criteria, investors look at a broad range of behaviors.
Environmental, social, and governance (ESG) criteria help investors find companies with values that match their own.
Environmental criteria may include a company’s energy use, waste, pollution, natural resource conservation, and treatment of animals. The criteria can also be used in evaluating any environmental risks a company might face and how the company is managing those risks. For example, are there issues related to its ownership of contaminated land, its disposal of hazardous waste, its management of toxic emissions, or its compliance with government environmental regulations?
Social criteria look at the company’s business relationships. Does it work with suppliers that hold the same values as it claims to hold? Does the company donate a percentage of its profits to the local community or encourage employees to perform volunteer work there? Do the company’s working conditions show high regard for its employees’ health and safety? Are other stakeholders’ interests taken into account?
With regard to governance, investors may want to know that a company uses accurate and transparent accounting methods and that stockholders are given an opportunity to vote on important issues. They may also want assurances that companies avoid conflicts of interest in their choice of board members, don't use political contributions to obtain unduly favorable treatment and, of course, don't engage in illegal practices.
No single company may pass every test in every category, of course, so investors need to decide what's most important to them. On a practical level, investment firms that follow ESG criteria must also set priorities. For example, Boston-based Trillium Asset Management, with $2.5 billion under management, uses a selection of ESG factors to help identify companies positioned for strong long-term performance. Determined in part by analysts who identify issues facing different sectors and industries, Trillium's ESG criteria include avoiding companies with known exposure to coal mining and those with more than 5% of their revenues from nuclear power or weapons. It also avoids investing in companies with major recent or ongoing controversies related to workplace discrimination, corporate governance, and animal welfare, among other issues.
Pros and Cons of Environmental, Social, and Governance (ESG) Criteria
In years past, socially responsible investments had a reputation for requiring a tradeoff on the investor's part. Because they limited the universe of companies that were eligible for investment, they also limited the investor's potential profit. "Bad" companies sometimes performed very well, at least in terms of their stock price.
More recently, however, some investors have come to believe that environmental, social, and governance criteria have a practical purpose beyond any ethical concerns. By following ESG criteria they may be able to avoid companies whose practices could signal a risk factor—as evidenced by BP's 2010 oil spill and Volkswagen's emissions scandal, both of which rocked the companies' stock prices and resulted in billions of dollars in associated losses.
As ESG-minded business practices gain more traction, investment firms are increasingly tracking their performance. Financial services companies such as JPMorgan Chase, Wells Fargo, and Goldman Sachs have published annual reports that extensively review their ESG approaches and the bottom-line results.
In this article we describe funding opportunities for social innovators worth checking out.
World Bank Funding and Grants
While the World Bank works primarily with the governments of developing countries, there are a wide variety of grant funding sources for Civil Society organizations that work worldwide. Please be advised to visit the following Grant Programs websites:
- Japan Social Development Fund
- Global Partnership For Social Accountability
To learn more about the work of the World Bank with Civil Society please visit www.worldbank.org/civilsociety
https://treasury.worldbank.org/en/about/unit/treasury/ida
https://inquiries.worldbank.org/knowledgebase/articles/907470-grants-and-funding
Global Innovation Fund
The Global Innovation Fund is a suitable funding opportunity for social innovators who aim to tackle social issues in the developing world and improve the lives of millions. The Fund’s approach to investing is ‘that the best ideas for solving some of the world’s most critical problems can come from anyone, anywhere. We can fund innovations focused on any developing country and can invest in any sector relevant to international development where there is a commitment to improving the lives of those living on less than $5 a day’. So, how do they drive social impact? Well, The Global Innovation Fund is determined to support social innovators in all stages of investing, by offering loans (including convertible debt), grants and equity investments in a range of $50.000 to $15.000.000. Social innovators can request funding from the organization when working on critical projects that could bring a major social impact, because the Global Innovation Fund can back innovations with large scale. The funding is meant for ideas, projects, concepts that benefit the poor in developing countries. Interested?
The Young Foundation
The Young Foundation is a non-profit, non-governmental think tank based in the UK specialising in social innovation against structural inequality. The foundation is a leading centre for social innovation and it tackles societal challenges by creating new solutions through social enterprises, movements and campaigns. The organization states that «we work with entrepreneurs with a great social business idea that they can demonstrate works. The organisations we support typically meet the following criteria: focus on changing peoples’ lives for the better (i.e. prioritise positive social impact), target customer groups inadequately served by existing private or public provision, disrupt existing markets by introducing more innovative or lower cost products or services, operate a robust, sustainable business model, have the potential to grow and broaden their social impact (UK wide or Worldwide) ». Are you interested in keeping up with the organization’s mission? To find more about the pioneering social innovation and investment work you have to get in touch with James Teasdale (Head of Venture Development). Just drop him a message at james.teasdale@youngfoundation.org.
Nesta
Nesta is a global innovation foundation that has as a mission to ‘seek out, spark and shape powerful new ideas, joining with others to take on the big challenges of our time and shift how the world works for everyone’. The foundation is located in the United Kingdom but works globally and always with the form of partnerships. They bring together the ‘very big, such as national governments and global technology firms, with the grassroots, such as community groups and local activists, to make change happen’. The charity has supported many projects so far and found itself among many success stories. Nesta is an expert on social innovation initiatives, which means that a social innovator wanting to apply for its grants or collaborate with it, would benefit greatly from such cooperation. Interested in finding more about the foundation’s work, becoming a partner or seeking for funding? Then you can directly request further information at information@nesta.org.uk.
McConnell Foundation
The McConnell Foundation, which is a private Canadian foundation, works on developing innovative approaches to cultural, economic, social and environmental challenges. To address those challenges, it provides grants and investments for social innovation initiatives, such as capacity building, convening and co-creation with the grantees, partners and public. Its mission it to «engage Canadians in building a society that is inclusive, reconciled, sustainable and resilient—and that advances progress toward the United Nations Sustainable Development Goals». In order to deliver its mission McConnel Foundation created the Social Innovation Fund, which supports social innovators and social entrepreneurs to strengthen their capacities to become capable of scaling greater impact. Are you living in Canada and want to make the world a better place? Don’t miss on this funding opportunity opportunity for social innovators and submit your proposal via their online portal!
Find more information here
Crowdfunding Funding Opportunities
Crowdfunding has emerged in recent years as an important source for individuals, to raise grants and investments for the development of business ideas or new ventures. People interested in the method can use online platforms to pitch their ideas on a proposed project to an online audience. The most famous platforms to seek crowdfunding investments are Kickstarter and Indiegogo. These platforms allow backers (online audience) to contribute money in exchange for rewards. For social innovators, crowdfunding helps engage citizens in a conversation. In this way citizens are investing in their communities or in solutions for issues dear to their hearts. Interested in pitching your project for a social grant? Have in mind that some of the best platforms that promote initiatives for social good are Crowdrise, Openideo and 33needs.com.
The Rockefeller Foundation
The Rockefeller Foundation is one of the historic largest foundations worldwide and in the United States has a great legacy in global development philanthropy. Its stated mission is ‘promoting the well-being of humanity throughout the world’. The private foundation has given more than $14 billion in current dollars to individuals that worked on projects that address societal challenges. Social innovators striving for the foundation’s support need to have thoughts on the greater good and have something catalytic to offer, if they want to get a shot at getting their hands-on Rockefeller’s money. The foundation’s current work focuses on fields such as Global Health, Climate & Environment, Urbanization and Social and Economic Security, as well as Basic Survival Safeguards. Do you think that you could be eligible for funding? Here is the site where you can directly submit your proposal.
Find extra information here
EIB Social Innovation Tournament
The European Investment Bank offers the Social Innovation Tournament that aims in support of Europe’s best social entrepreneurs. The tournament takes place in different countries each year and awards social entrepreneurs and innovators that come up with ideas and solutions, which have as a primary purpose to generate social, ethical or environmental impact. Every year 15 finalists are selected from hundreds of applicants across Europe working on education, health, environment, circular economy, inclusion, aging and environment. At the final event ‘all projects compete for the General Category and Special Category 1st and 2nd Prizes of EUR 50 000 and EUR 20 000 respectively. In 2018, the Special Category Prizes will go to projects focusing on sustainable development with special emphasis on circular economy. Projects also compete for a residency at IRIS (Incubadora Regional de Inovação Social) and for numerous mentoring vouchers’. Are you ready to take up the challenge? Take note that you need to be familiar with the Rules and Key Dates & Deadlines for the applicants. | Find extra information here |
European Commission
‘The Commission promotes commercialisation and uptake of innovation through the Horizon 2020 programme and the European Structural and Investment Funds (ESIF). With the budget of EUR 80 billion, Horizon 2020 will help bring innovative ideas to life. ESIF will dedicate around EUR 110 billion to innovation activities, ICT, small and medium-sized enterprise (SME) competitiveness’. In that aspect, social innovators can come up with ideas, concepts, projects or products that could lead to crucial social impact and alter the lives of millions. Individuals interested in finding funding opportunities for social innovators from European Commission programs have to submit their ideas based on specific programs. All you have to do is go to the online portal and find which program fits you best. | Find more information here |
MIT IDE Inclusive Innovation Challenge
‘The Inclusive Innovation Challenge (IIC) is the flagship initiative of the MIT Initiative on the Digital Economy (IDE). In 2018, the IIC launched a global tournament (in five regions: Africa, Asia, Europe, Latin America and North America), and seek applications from early and growth stage start-ups, and entrepreneurial organizations that are 1) using technology to reinvent work and create economic opportunity for working people below the top rung of the economic ladder; 2) demonstrating traction and impact and enhancing shared prosperity today; 3) are beyond the “idea phase”. Any age, size, or type (for-profit or non-profit with plan for financial sustainability) is welcome to[i] apply. For more information check out the webpage application deadlines are varying in each region’.
Gates Foundation Grants
https://www.gatesfoundation.org/how-we-work/general-information/grant-opportunities
The foundation awards the majority of its grants to U.S. 501(c)(3) organizations and other tax-exempt organizations identified by our staff. (Tax status definitions) (Glossary of terms)
Request for Proposals (RFP):
Grand Challenges Grant Opportunities
Re-Examining Traditional Method Use
Gulbenkian Foundation
https://gulbenkian.pt/uk-branch/how-we-work/about-open-fund/
Gulbenkian Foundation approach to funding is that thye do not accept unsolicited applications. This is because they do not fund projects or organisations reactively. Gulbenkian Foundation think of our approach as being ‘interactive’ rather than ‘reactive’ or ‘proactive’.
What they do - The UK Branch works programmatically, selecting a limited number of specific causes where we believe we can make a demonstrable difference.
Our approach is firstly to:
Undertake desk research and consult with relevant actors in civil society and beyond
Seek proposals on an open or restricted basis.
We use this work to identify potential partners. This then informs the organisations we work with to develop proposals which invariably involve working in coalition with others. This then becomes the work we fund.
You can read about our current grants on 360 Giving.
Our parent body in Portugal gives grants in a number of different fields. You can read all about them here.
Beehive
Beehive is a web based tool that checks and matches your funding proposals with eligible and appropriate funders.
Directory of Social Change
The Directory of Social Change produces a number of guides and directories for those seeking funding.
Sources
https://en.m.wikipedia.org/wiki/Environmental,_social_and_corporate_governance
Limitless colleague, dr Anita Fuzi
http://www.socialinnovationacademy.eu/8-funding-opportunities-for-social-innovators/ via @@SocInnovAcademy
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Dinis Guarda is the founder and chief vision architect for citiesabc.com and CEOCreatorAuthor of freedomxcom. He has before created the platforms openbusinesscouncil.org, fashionabc.org, intelligenthq.com, hedgethink.com, tradersdna.com and and IP technologies blocksdna.com, lifesdna.com, iDNA and indexDNA.
With 20+ years experience in international business and digital transformation Dinis Guarda has been a Lecturer and guest Speaker in international business schools such as: Cambridge, Kings College, Copenhagen Business School, INSEEC, Monaco University among others. Dinis is the author of various books. His upcoming book, titled 4IR Magna Carta Cities ABC: A tech AI blockchain 4IR Smart Cities Data Research Charter of Liberties for our humanity is due to be published in 2020. Before that, he has published “4IR AI Blockchain Fintech IoT Reinventing a Nation“, “How Businesses and Governments can Prosper with Fintech, Blockchain and AI?”, also “Blockchain, AI and Crypto Economics – The Next Tsunami?” among others. He was responsbile for over 20 books/ebooks/magazines published in various languages.
Dinis is a serial entrepreneur and CEO / chairman of the companies ztudium / techabc / open business platform. Dinis is involved as a strategist, board member and advisor with the payments, lifestyle, blockchain reward community app Glance technologies, for whom he built the blockchain messaging / payment / loyalty software Blockimpact, the seminal Hyperloop Transportations project, Kora, and blockchain cybersecurity Privus.
He is listed in various global fintech, blockchain, AI, social media industry top lists as an influencer in position top 10/20 within 100 rankings: such as Top People In Blockchain | Cointelegraph and https://cryptoweekly.co/100/ .
Between 2014 and 2015 he was involved in creating a fabbanking.com a digital bank between Asia and Africa as Chief Commercial Officer and Marketing Officer responsible for all legal, tech and business development. Between 2009 and 2010 he was the founder of one of the world first fintech, social trading platforms tradingfloor.com for Saxo Bank. More about him here https://www.openbusinesscouncil.org/wiki/dinis-guarda/
