A stock exchange focused on “profit with a purpose” is preparing for a full launch in Scotland after agreeing to carry out a study on the project’s feasibility with the City of Edinburgh Council.
The Social Stock Exchange, which was founded in 2013 and has 43 members with a collective valuation of more than £2 billion, last year revealed it was planning to launch north of the Border.
We feel we are best placed to host and support a Social Stock ExchangeCouncillor Alasdair Rankin
The four-month study will seek the views of local business leaders and potential investors to examine the viability of such a venture, which aims to provide businesses that deliver a positive social or environmental impact easier access to capital markets.
READ MORE: A history of Scotland’s stock exchanges
Mike McCudden, director of the Scottish Social Stock Exchange, told The Scotsman that it is already working with about ten companies in Scotland planning to raise various amounts of capital, and it aims to be fully up and running by the end of the research phase.
Glasgow was previously earmarked for its base, but McCudden said it “feels right” to operate from Edinburgh given that it is the Scottish capital and financial centre, and its focus is Scotland-wide rather than just the central belt.
The venture is maintaining its target of 30 new members in its first year, and so far has identified about 1,500 companies across Scotland that fit its profile, although it imposes stringent admission criteria.
The exchange will allow retail investors of any size to buy and sell shares in projects they want to support, and McCudden said initial feedback from Scots, both at home and expats, has been “hugely supportive” for the initiative.
Its progress follows a high-profile year for social enterprise in Edinburgh, with the visit by Leonardo Di Caprio to homeless-focused Social Bite, for example, and McCudden believes such projects are to the exchange’s benefit.
Echoing his comments was councillor Alasdair Rankin, finance and resources convener at the council, who said: “As a capital city and financial centre, we feel we are best placed to host and support a Social Stock Exchange.
“We know from our ongoing work in developing a 2050 Vision for Edinburgh that residents yearn for a more compassionate and equal city and are focused on narrowing the gap between rich and poor.”
While stock exchanges are now highly computerised, McCudden insists that the social version needs a physical presence in Scotland. Working out of the council’s headquarters for the foreseeable future, plans are to take on two staff imminently and expand “as demand dictates”.
Glasgow, Edinburgh, Dundee and Aberdeen previously had their own exchanges, but were amalgamated into the Scottish Stock Exchange in Glasgow, which was itself later absorbed into the London Stock Exchange.
With the Social Stock Exchange having launched local exchanges elsewhere in the UK, McCudden said it is a possibility in other Scottish cities, but not a priority.