Content

Impact investing in Taiwan

by Gregory Buxton and Niki Chen

Impact investing challenges the traditional view that (i) social and environmental issues are best solved through philanthropy and government policy and (ii) market investments should be primarily focused on the generation of financial return. By using the corporate investment model to organize financial and other resources, impact investments have produced, and will continue to produce, positive social and environmental change that is both measurable and sustainable. On a global basis, impact investors are already providing significant capital to sectors such as renewable energy, microfinance, healthcare, education, and sustainable agriculture.

In Taiwan, awareness of the value of impact investing and the development of social enterprises has been steadily growing over the past several years. As early as 2012, Social Enterprise Insights (“SEI”) launched the first Mandarin-based online information portal focused on social enterprise and innovation. The Taiwan-based portal provides resources related to social innovation and the incubation and development of social enterprises from around the world. SEI fosters the development of social enterprises in the Sinophone world by allowing Chinese readers to learn about and learn from experiences of social enterprises from around the world.

Set out below are a few leading private institutions that are active in the social enterprise space. If you are a budding social entrepreneur or otherwise wish to get involved in this rewarding and growing field in Taiwan, you may wish to contact and get involved with one or more of these organizations.

  1. iLab. Launched by SEI in 2014, iLab is the first social enterprise incubation program in Taiwan. It is based on the U.K.’s UnLtd model and works to bridge the gap between startup competitions and venture capital financing.
  2. B Current Impact Investment Inc. Launched in 2014, B Current Impact Investment Inc. (“BCI2”) is a leading social enterprise in Taiwan focused exclusively on impact investments. Established by professionals with backgrounds from Taiwan and Silicon Valley, BCI2 works with local social entrepreneurs to create investment opportunities attractive to impact investors.
  3. The Social Enterprise Revolving Trust. The Social Enterprise Revolving Trust (“SERT”), founded in 2015, works to create a sustainable social enterprise ecosystem. SERT funds promising social enterprises with the understanding that such enterprises will (i) earn a return for the trust which will be used to fund other social enterprises and (ii) further reciprocate by sharing their experiences and collaborating with other SERT-backed social enterprises.
  4. B Lab Taiwan. B Corps are active and thriving in Taiwan. B Lab Taiwan actively promotes the B Corp mission of promoting “businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.”  They assist social enterprises gain a better understanding of the B Corp mission, navigate the certification process, and ultimately take their place as an active participant in the growing B Corp community. Our firm is a certified B Corp and is active in the B Corp movement. Please contact us if you are interested in learning more about B Corps in Taiwan.

In addition to private initiatives, the Taiwan government has taken steps to support and foster impact investing and social enterprise development in Taiwan. In 2014, the Executive Yuan launched a three-year Social Enterprise Action Plan (the “SAEP”).  The SAEP aimed at fostering the development of social enterprises in the country through promotion of deregulation, networking, financing, and incubation. Founded in 2017, the Social Innovation Lab continues the government’s social enterprise mission by serving as a one-stop venue for social enterprise related government services.

It is also worth noting that the most recent amendments to the Company Act promulgated in 2018 provide: “When conducting its business, every company shall comply with the laws and regulations as well as business ethics and may take actions which will promote public interests in order to fulfill its social responsibilities”. This additional language makes it clearly legal for companies to pursue purposes other than merely maximizing the financial return of equity holders.

Compared to other countries, impact investing is still in its infancy in Taiwan. There is still much that needs to be done to create and maintain a robust and sustainable ecosystem for social enterprises in Taiwan. However, Taiwan is slowly and surely moving towards this goal. As recently as July 2020, London’s asset management company, Kinnerton Capital, was pursuing sustainable construction in Taiwan. Taiwan’s wind turbine projects in particular have generated significant global interest in sustainable and renewable energy alternatives.

We look forward to the continued growth of impact investing in Taiwan. If you are interested in developing or funding a social enterprise in Taiwan, please contact us.  We are always happy to share our experiences and expertise with other social entrepreneurs and investors.

For more information on impact investment in Taiwan, please contact Gregory Buxton at gbuxton@winklerpartners.com.

 

Archives