UBS’s programme to support social enterprises is all about making a positive difference to local communities, as we find talking to Jonathan Brown.
People want to make a difference, they want to address some of the problems that face communities around the world.
And those with the financial means are increasingly finding ways to do just that.
Jonathan Brown, head of UK regions for wealth management at UBS, says: “We’re seeing more and more clients involved in philanthropy, wanting to make a difference and wanting to use their capabilities and capital to help people both globally and on a local basis within their own communities.’’
Of course, we rely on governments – our own and others – to tackle the great issues, but there’s a growing realisation that governments and the private sector must collaborate.
Research by Triodos Bank reveals that most investors believe that businesses and not governments have the ability to address many of the biggest challenges facing the world. Nearly three-quarters of those surveyed said companies can create positive social and environmental change and half believed the state seems powerless to change society for the better.
Also, while investors have realised that businesses can be an effective way to tackle social issues – whether that be providing people in developing countries with clean drinking water or access to education – these businesses can still make a decent return on investment.
Jonathan Brown’s colleague Mark Haefele, chief investment officer of UBS Global Wealth Management, in a recent article in the FT, demolished the old myth that investors must sacrifice returns for sustainable and impact, investing (SII).
He argues that impact investing is no longer only about avoiding certain activities, such as armaments or tobacco, but of backing good things, and, when these are added to the definition of SII, the returns begin to look far more attractive. Haefele points to research showing that, of more than 2,200 academic studies, over 90% of them have found that environmental, social and governance (ESG) factors have a positive or neutral impact on financial returns.
“Research is showing now that one can invest on a sustainable basis and still enjoy the same sort of returns as a traditional investment portfolio,’’ says Brown. “The attitude now is, 'if we can invest on a sustainable basis, then why wouldn’t we do that?'.’’
UBS is at the forefront of this drive to encourage and enable ethical and philanthropic impact investing.
UBS in society is the bank’s programme to coordinate all its activities in sustainable investing, philanthropy, environmental, human rights and community investment.
With almost 20 years' experience and a team of over 40 experts working globally to support clients as they seek to maximise the effectiveness and impact of their giving, UBS' Philanthropy Services supports clients with providing tax-effective giving vehicles, such as the UBS UK Donor-Advised Foundation and strategic advice, in particular through experts in the UBS Optimus Foundation.
The UBS Optimus Foundation was established in 1999 as an independent grant-making foundation committed to improving the wellbeing of children. In 2017 it raised SFR61m (circa £48m) and reached 2.1 million children. It’s currently supporting about 128 projects around the world.
In the words of the bank’s chief executive Sergio Ermotti: “We aim to overcome disadvantage by supporting education and entrepreneurship in our local communities through funding and the commitment and skills of our people.’’
Its international client base of investors and high net worth individuals who are interested in impact investing gives the bank powerful leverage in tackling its social goals.
Finding the right philanthropic investment 'deals' can be daunting and the process often lacks the clarity and precedents of for-profit investment decision making. Brown explains: “Often, we will have clients who are looking for places to donate globally and we can find those opportunities for them. We can partner and co-fund alongside our clients, thus leveraging our clients' funding. That’s where our reach can really help our clients.’’
In the UK, UBS’ social engagement has a direct impact through its Community Affairs programme, which works to overcome disadvantage by improving outcomes and opportunities in local communities. It does this through building long-term partnerships focused on education and social entrepreneurship, through strategic investments and by harnessing the time and skills of its employees.
“In a similar vein, both internal and external research on the impact of our Community Affairs programme points to wide-ranging community and business benefits”, says Brown. “Our model of community investment, which combines strategic grants with employee volunteering, is delivered consistently across the globe and in particular where we have a business presence to facilitate employee involvement. We give our employees two days a year to volunteer and coordinate a wide range of projects, within our themes of education and social entrepreneurship, for them to engage in. Last year, 45% of our employees in the UK volunteered through our Community Affairs programme."
UBS is currently extending its programme beyond London to disadvantaged communities in the UK regions, continuing its emphasis on education and social entrepreneurship.
In terms of social entrepreneurship, it works closely with organisations such as UnLtd, an umbrella organisation that provides grants, training and support to social entrepreneurs across the UK, and access to an international network of enterprises.
“We also have our own programme of support – UBS Global Visionaries - which enables us to share the expertise of employees and engage clients in an innovative way,’’ says Brown.
Participants in the Global Visionaries programme are inspirational thought leaders and social innovators. Each year UBS identifies 20 such changemakers from across the globe to benefit from access to clients and our networks, grant funding and employees’ expertise.
“We give them access to our networks and to our people and provide an opportunity for them to speak and to promote themselves at our events,’’ says Brown. “Often we will look to partner with them and give them focussed support, as necessary,’’ he continued.
Broadly speaking, a social enterprise is an entity or organisation which has the delivery of a specific social impact at the heart of its business model – a definition which clearly can cover a massive range. Key to them all, however, is that they are run as businesses and this makes them particularly effective vehicles for achieving positive social change.
As Brown explains: “The discipline of running a social enterprise as a business is really quite important because it opens up the door to new forms of income and capital, such as investors interested in sustainable and responsible investments.
“Adopting a business model, they can become commercially viable and resilient, and have the ability to compete in the modern world. But the core difference is that their success is measured by the impact it makes on people and communities, rather than the money that goes into their bank account.
“A social enterprise is very much focused on outcomes and the difference it can make; it’s not focused on how much money it makes out of its business.’’
Through its Community Affairs programme, UBS supports social enterprises in ways that add value directly to their organisations, e.g. by providing access to finance, marketing expertise, branding advice and technology professionals.
Brown says: “Often it might be a young individual with a great idea but they don’t know where to go to from there. So we use our networks and our expertise to help the social entrepreneurs think through their vision, develop their ideas and importantly to help them meet their ambitions.
“Why do we do this? Simply because it’s the right thing to do. As a large, global organisation we have a responsibility to the communities in which we do business and the wider community in which we live. By extending our programme - whether it’s in Hackney or in the North East or Scotland - we are continuing to build beneficial relationships with more communities to bring significant and lasting value in addressing today’s societal challenges.”
The UK Social Entrepreneur Index, sponsored by UBS, is a celebration of social entrepreneurship across the UK.
Open to social entrepreneurs tackling a social or environmental issue at any scale, entrants will act as beacons of inspiration for others to encompass positive social impact.
For more info visit www.socialentsindex.co.uk.
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