The product design phase combines research and feasibility analysis, constructing and testing the different elements of the product, and developing the business case. While we have identified a sequence of steps below, in practice, several of these steps can occur in parallel, or in a different order than described below. Overall, it is important that the product design steps should be an iterative process to examine both the investment opportunities and the investor appetite, and assess the best option for a product structure(s) to connect them.
- Validating Investor Demand
- Assessing Impact Opportunities
- Determining Product Structure
- Gaining Approval
Key Staff: Product Development and Wealth Advisors
Research and our interviews suggest that there is significant latent demand among retail investors.  The majority of survey respondents claim that they are interested in impact investing, but the number of investors that actually engage in impact investing remains low. While existing credit union members may already have bought into the organizational mission and therefore assumed to be interested in an impact product, this must be further tested and validated.
BOX 5.4: Creating impact investor segments
Money for Good was a survey conducted by Hope Consulting in 2010 to understand US consumer preferences, behaviors, and demand for impact investment products. It identified five different archetypes of investors interested in impact investment, each of which displayed specific preferences around risk, return and impact, as noted below:
- Safety First: “I want to know I’ll get my money back and maybe some upside. The social benefits are secondary”
- Socially Focused: “This is a great way to support the causes that are important to me”
- Hassle Free: “If I don’t have to look too hard and it’s a pretty liquid investment, I’m willing to try”
- Personally Recommended: “A business school classmate is a social entrepreneur. I’m happy to invest in his venture”
- Skeptic: “I keep my charitable giving and financial investments separate. I’m not at all interested”
What do retail investors look for in an investment product?
To understand the drivers – that is, why investors choose impact investment products and what they are seeking – market demand research must reach beyond the characteristics of individuals. Drawing on survey data commissioned by a range of organizations, and the interviews for this research, several drivers stand out as reasons for why investors choose impact investing products:
- Risk: For retail investors that are not familiar with impact investing, the high perceived risk has been identified as a major concern. In the relatively volatile financial markets over the last decade, retail investors tend to display a conservative risk appetite, and are concerned with capital preservation and protection of downside risk. Products that provide investors with risk protection are important.
- Liquidity is a consideration as retail investors that typically value the ability to easily convert their investments into cash, as well as track record.
- Accessibility: Financial products that are easily accessible through financial advisors, brokerages or online platforms are a key factor in investor uptake. However, getting a retail impact investment product “on the shelf” of financial institutions has been difficult because of the points above, as well as competition from conventional products that may seem more lucrative in terms of their product structure, financial return expectations, and risk profiles. Market surveys suggest that individuals seek products that are simple and easy to understand.
- RRSP Eligibility: For many retail investors, RRSP eligibility is an attractive – and familiar – quality that would compel them to make an investment. However, as many of these products are relatively new and may have novel designs, it may not always be straightforward for them to qualify. While it can be possible for many of these products to be part of a self-directed RRSP, the nature of this process and potential fees can act as a deterrent to some investors.
Another consideration is the sector of impact in which investors are most interested. While there is limited data on investor preferences, sectors such as affordable housing, renewable energy and sustainable agriculture are among the impact areas that have been of interest to both institutional and accredited investors. As many of these issues are context dependent – for example, whether the investments are local, or as part of a broader national or global set of opportunities –further research is required on preferences for potential retail impact investors.
What do retail investors believe about impact investing?
Investment beliefs are another driver for retail investors, and impact preferences must be added to traditional risk-return considerations when designing, distributing, and evaluating products.
One belief that may be a challenge to impact products is the perception of a tradeoff between financial and social returns, a perception that may be found in both clients and advisors. While this is an issue for all types of investing, many conventional products have been in existence much longer than impact products, which may have relatively short track records. In addition, comparing conventional products to impact products is not always an accurate apples-to-apples comparison given that they likely have different objectives and may display different thresholds around risk, return, and impact factors.
BOX 5.5: Emerging evidence on the tradeoff myth
One of the most prominent challenges facing impact investing is the notion that there is necessarily a tradeoff when integrating social or environmental considerations within a portfolio or product. There is now a range of compelling evidence to suggest otherwise, and even that impact investments may – when judged against comparable investments in similar asset classes, or product types – outperform through superior returns or lower volatility and risk.
- A study by Morgan Stanley of broad strategies around sustainability found that “Investing in sustainability has usually met, and often exceeded, the performance of comparable traditional investments. This is on both an absolute and a risk-adjusted basis, across asset classes and over time.”
- A research note by Merrill Lynch on assessing the opportunities in impact investing noted that, “While various targeted or thematic strategies in the impact space, or certain types of sustainable companies, may provide the potential for alpha or excess return over the market, at a minimum, impact investments can often be used in a client’s market based portfolio while preserving risk and return as compared with other market rate investments.” 
- A study of private equity impact funds in both developed and emerging markets by Cambridge Associates conclude that, “Despite a perception among some investors that impact investing necessitates a concessionary return, […] impact investment funds launched between 1998 and 2004—those that are largely realized—have outperformed funds in a comparative universe of conventional PI funds.”
- A study by Wharton used a different data set and technique to arrive at similar conclusions, noting that “The strict dichotomy of strong returns versus strong impact may be unfounded […] Preliminary analysis demonstrates a gross internal rate of return of 12.94% […].Early results indicate financial performance is comparable to a Russell Microcap index (PME 0.98) and to an S&P 500 index (PME 1.00) for the time period between 2000 and 2015.” 
BOX 5.6: CoPower
In February 2016, CoPower, a Canadian clean energy intermediary that provides project financing to renewable energy and energy efficiency projects, launched a retail green bond. The 5-year bond – with a $5,000 minimum, provides investors with a 5% annual yield paid out on a quarterly basis. When developing the business case for a retail product, CoPower’s executive team validated the demand for a retail product with their existing investor base (accredited investors), wealth managers and individuals connected to clean energy and impact investing networks. Trish Nixon, Director of Investments at CoPower, explained that they “began with a hypothesis that there was untapped demand from individuals for green products that generate steady yields – and that web technology could be a tool to reach a broader segment of investors directly.” When raising their first and second private funds from accredited investors, “we saw a lot of excitement from potential investors who were looking for this type of product but at lower entry points. That type of feedback has escalated as we continue to tell the CoPower story. We used secondary research to supplement our conversations.”
Key Staff: Community Engagement
Assessing the impact opportunity can take a number of forms. In some cases, the credit union can identify an external partner that has access to opportunities that require capital (as described in the Oikocredit case study). In other cases, the credit union itself has access to a pipeline of impact investment opportunities within its portfolio. The credit union may also recognize an opportunity to expand its work within a specific sector or thematic area (for example, renewable energy, or sustainable food and agriculture).
While retail investment capital is typically not invested in individual opportunities, there are approaches to construct new products from the existing portfolio (as demonstrated in the Resilient Capital case study). Regardless of the chosen approach, assessing the impact opportunity involves identifying the channel where provision of (retail investor) capital can generate social and/or environmental impact.
Looking Inward: Small Business and Community Lending
Credit unions should analyze their community and small business lending programs to assess whether they may already be working with social impact organizations (e.g., non-profits and social enterprises). In evaluating whether the credit union has access to a potential set of opportunities that could form the basis for a product, the following questions can be a good starting point:
- What percentage of loan requests are from non-profit organizations, community organizations, or social enterprise organizations?
- Of the loan requests that are received from social impact organizations, how many are granted? For those that were denied loans, what typical barriers prevented a positive assessment?
- What are the terms on requests (e.g., repayment terms, timelines, collateral)? Do they differ from terms demanded by traditional loan applicants (e.g., small businesses)?
- Is there information that is not readily available from these organizations? Alternatively, are there categories of information that are not integrated within the diligence process?
- Are there examples where these organizations have received financing through the credit union more than once? What are the characteristics of these examples?
Looking Outward: Social Finance Intermediaries
Many communities often already have social finance intermediaries that operate within their region privately or as part of a provincial or national entity. These intermediaries range in size and sophistication, but can be potential partners for credit unions because they may have already assessed where the critical financial gaps are in local or regional communities. Examples that are worth considering include the following:
- Community loan funds exist in many urban centres and typically provide small loans to individual and social sector organizations on favourable terms.
- Social enterprise loan funds operate across Canada and have been set up to provide purpose-built debt financing for social enterprises often with technical assistance supports.
- Community investment funds, such as the Community Forward Fund and the Canadian Alternative Investment Cooperative, provide a range of financing options for non-profits, charities, and social enterprises and bring deep expertise and access to opportunities.
- Community development investment funds (CEDIFs) currently operating in Nova Scotia, Québec, Manitoba, and PEI are part of a capital raising program that allows local citizens to invest in local enterprises directly or through intermediary organizations. In this model, investors are incentivized with a tax credit from the provincial government.
- Community foundations are increasingly engaged in a range of social finance activity and could be potential partners to initiate or scale opportunities to finance underserved areas.
- Non-profit networks, such as Pillar in Ontario, HubCap in British Columbia, and CCEDNET nationally, faciliate access to potential pipeline partners and sector trends.
Assessing Intermediary Collaborations
While some credit unions will have the ability to pull together all elements of a retail impact investment product in-house, many will need to partner with other organizations in order to make the process feasible or more efficient. Partnering is not only about finding new opportunities, but also about efficiency by utilizing the expertise of specialized organizations and advisors.
Distribution: Calvert Foundation has made significant investments in building and maintaining relationships with brokerage firms and other financial intermediaries for the benefit of its retail investors. This investment has paid off, as Calvert Foundation’s Investment Note has become a successful platform for accessing the retail investor market.
Back Office: While credit unions will likely manage their own back office functions, they may insist that their community partners (i.e., non-profits or social enterprises) strengthen their organizational infrastructure around financial reporting. Building strong partnerships with financial organizations is thus critical (See box).
BOX 5.7: Working with Social Finance Intermediaries
The Toronto Renewable Energy Co-operative (TREC) has established Canada’s first community investor administration service, which provides co-ops and non-profits with securities transfer processing, security holder record-keeping, and a streamlined context for member/investor inquiries. TREC is administering over $20 million in debt/equity issue, and has acted as the investment management services company for the community bonds issued by the Centre for Social Innovation and Solarshare.
Assessing Intermediary Collaborations
Our research indicates that credit unions often have a general idea of organizations that they might partner with but are usually keen to understand them better. Successful examples of partnerships (e.g., Assiniboine and MSCU case studies) have required building trust among organizations and being willing to identify mutual benefit with some level of risk sharing. As credit unions assess potential partners, the following indicators are important to look for:
- Mission alignment: Partners need to understand and have similar motivations. Mutual mission alignment throughout the process will help both parties remain focused and engaged.
- Credibility and capacity: Evidence of successful operations are indicators of an external partner’s capacity to execute a potential partnership.
- Adaptability: Partners need to display a willingness to be flexible to changes in the original product concept, the timeline, and the process.
- Responsiveness: Partners should respond to credit union inquiries in a timely manner in order to maintain momentum and trust during the product development process.
Many credit unions are keen to create products that generate impact and direct capital locally. While this is understandable from a mission perspective, it can be problematic if they are unable to find adequate local impact opportunities. In these cases, it is prudent to look beyond local borders and consider national (Canadian) or global (developing country) opportunities. These can include sectors such microfinance and financial inclusion, agricultural lending, renewable energy, and affordable housing. The Oikocredit/MSCU partnership is an important example in this regard where despite its international focus members have resonated with the impact of providing access to finance to underserved communities and the associated positive impacts on businesses and households.
Key Staff: Senior Management
By deepening their understanding of customer demand and impact opportunities, credit unions can better assess the options for product structuring. In some cases, the structure of the product will be clear from the initial planning phase, while in other cases, the structure may evolve to match investor and organizational preferences. While most considerations for determining product structure are the same as those for developing conventional investment products, there are additional dimensions relevant to retail impact investment products.
Assessing Financial Feasibility
Many of the dimensions of assessing financial feasibility for a retail impact investment product remain the same as conventional products. However, there can be some additional considerations that impact on financial feasibility, as we note below:
- Revenue Potential In some cases, the revenues associated with retail impact investment products have been lower than conventional investments. These products have historically been relatively niche and targeted to specific investor segments, although recently these products have reached a broader audience.
- Assessing Costs While our research indicates that the costs of developing and deploying retail impact investment products can be higher than conventional products, this is not always necessarily the case. Additional costs that may need to be considered, can include risk assessment, developing impact measurement and reporting systems, technical integration within IT systems and internal reporting processes, or customized marketing materials.
- Risk Assessment – There may be additional costs involved from risk assessment due to the nature of underlying assets (e.g. nonprofits or social enterprises who are reliant on government funding), or the nature of the product or sector (e.g. where there is limited track record within an emerging sector such as previously was the case in renewable energy).
- RRSP Eligibility – Retail impact investment products do not automatically qualify for RRSP eligibility, and there are examples where product issuers have used alterative mechanisms. For Canada, two notable examples are Solarshare and the Centre for Social Innovation, which have explored the use of self-directed RRSPs, working with financial intermediaries, and creating a product under specific regulatory exemptions. The costs of these types of variations may include additional direct costs for product issuers or distributors, or for credit union members.
The credit union must consider non-financial risks specific to impact investment products, which can include – and also go beyond – risks of conventional product development. These risks can be non-traditional, and there may be a lack of standard tools for their measurement. Examples include the following:
- Investment risk: For impact investment products in which the credit union commits risk capital, the credit union will need to do an investment risk assessment to determine the probability that the credit union could lose all or part of its investment. One key element should include execution risk, especially for new partnerships or innovative structures. Lenders in the commercial credit department can undertake a risk assessment to provide information to management and the Board. Collateralization or the application of loan loss guarantees may minimize the risk. Pooling a number of these investments together can also create a diversified portfolio that can minimize risk.
- Social impact risk: While there are several definitions of social risk, it can be defined as “the risk that an institution’s investments might alienate key stakeholders and/or compromise the values of the organization.” While this is arguably a facet for all credit union products, developers of impact investment products should be aware of potential challenges of inadequate or negative impact results. Some strategies to mitigate social impact risk include clarifying objectives and motivations, understanding customer demand, and designing impact measures with sector experts and community partners.
- Reputational risk: With the introduction of retail impact investment products, credit unions may be seen to be “greenwashing.” In the course of our research, some interviewees noted that introducing a new retail impact product might lead members to question whether the rest of their deposits in the credit union were invested in ways that were not consistent with their values. To mitigate this risk, clearly communicate how the credit union’s range of products align with its mission. It is also always important for credit unions to be transparent, honest, and conservative in their reporting.
Table 5.1: Selected risk factors and de-risking strategies
|Performance expectation||Risk Factor||Financial Institutions||Retail Investors||De-risking strategy|
|Capital preservation, at a minimum, in either real or nominal terms||Capital risk||Lack of clarity about whether competitive risk-adjusted financial returns are widely achievable has led to a focus on limiting downside.||Generally, wealth is for retirement purposes or for the next generation, making capital preservation, at a minimum, a priority.||Downside Protection
· First loss / Guarantees
· Diversification through a multi-asset portfolio
· Diversification through a range of investments that are of the same asset class but create exposure to sufficiently diverse sectors or geographies
|Transaction costs in proportion with potential returns||Transaction cost risk||Require sufficiently large capital outlay to justify expenditure on due diligence, structuring and management of impact investments.||Require transaction costs to be sufficiently low so as to be in proportion to smaller investment.||Bundling
· Scale through a multi-asset portfolio
· Scale through a range of investments that are of the same asset class but create exposure to sufficiently diverse sectors or geographies
Source: Bridges Ventures and Bank of America
Legal and Regulatory Considerations
The legal and regulatory considerations for developing retail impact investment products are largely the same as they would be for conventional product development, though they can also be more complicated depending on the product structure. While the regulatory regime has evolved over time, a primary principle is to protect investor interests and assets. As a result, significant time and effort is required for due diligence and reporting, in order to comply with existing regulations around the design and issuance of products. This is particularly true for retail products, with an emphasis on disclosures of the features, risks and costs.
One of the key concepts in understanding the legal and regulatory framework for impact investments is the distinction between securities and banking products. Offerings of stocks, bonds, mutual funds and other kinds of public market investments and private placements are defined as securities, and regulated under provincial securities acts and regulations. The public policy aim is to protect investors and enhance the efficiency of the markets.
This is distinguished from products offered by banks and credit unions, such as term deposits or guaranteed investment certificates on the savings side, and personal and commercial loans on the credit side. Unlike offerings of mutual funds, stocks and bonds, which are regulated under securities rules, credit union products are regulated by provincial credit union regulators. They are not considered securities. The public policy aim is to avoid systemic risks.
There are important reasons why savings products offered by banks and credit unions are under a different regulatory regime. Term deposits and GICs are subject to Canada Deposit Insurance Corporation guarantees and credit union savings products are subject to credit union deposit insurance in the province in which they are located. This provides a level of safety to the investor that is not found in securities. The reason that they qualify for deposit insurance is that they are backed by the balance sheets of the credit union or bank and the bank or credit union is required to put up a portion of its own capital to support these products. As a result, they are deemed to be low-risk investments suitable under the Income Tax Act for RRSP, TFSA and RRIF accounts.
This has important implications for impact investment products offered by credit unions. In order to be deemed compliant by credit union regulators, impact investment products must be categorized as a credit union product, and not as a security. To illustrate, refer to the MSCU/Oikocredit case earlier in this paper:
The key concept that was communicated to DICO (Deposit Insurance Corporation of Ontario) was that it was the credit union itself that was taking on the risk, and not the retail investors. The retail investors place funds in a term deposit that was not directly invested into Oikocredit International. MSCU supplies matching capital that would be invested into Oikocredit International directly. The decoupling of risk between the investor and the investment in Oikocredit International allowed the regulators to confirm the product qualified for deposit insurance.
The fact that the underlying investment in the impact product is backed by the credit union is crucial to this type of impact product. This does not mean that this is the only way of structuring impact products. For example, the relationship between the Jubilee Fund and Assiniboine Credit Union described earlier represents another possibility. Overall, each credit union will have to identify the specific regulatory and legal considerations that apply to its specific choices.
That said, recent developments in the financial industry have opened up new opportunities for developing and deploying retail impact investments, and two relevant examples are noted below.
- Equity crowdfunding is the offering of unregistered securities through a registered funding portal/platform to raise small amounts of money from a large pool of non-accredited and/or accredited investors.  Certain provinces in Canada now have updated guidance and specific exemptions, as noted in the Start-Up Crowdfunding Exemption (May 2015), and the Integrated Crowdfunding Exemption (January 2016). These regulations could uncover new opportunities for retail impact investing particularly for product issuers and credit unions.
- Community bonds allow nonprofit organizations to raise capital from a pool of investors, and issuing a community bond is often linked to the purchase of an asset (such as a building). For many nonprofits, the costs of developing and issuing a community bond can be significant, and will require access to specific financial and legal expertise. However, there are now several examples of community bonds across Canada (notably the Centre for Social Innovation, Solarshare and Zooshare), and credit unions have played a facilitation role in some of them. There are also additional resources to help nonprofits, including a community bond guide and templates from the Centre for Social Innovation, and publication on community bonds within the BC context.
BOX 5.8: Solarshare Qualified Investments
Solarshare has created a set of option to make its product accessible for retail impact investors, and eligible for RRSP, RESP and TFSA. It has commissioned an independent legal opinion that Solar Bonds are qualified investments under Regulation 4900(1)(j) of the Income Tax Act that are available on its website. It has also developed two pathways that retail investors can use in order to confirm RRSP eligibility, which are noted in the diagram below. The first it is via a self-directed RRSP/RESP/TFSA, which includes a series of steps to fill out documentation with a broker. The second is through opening an RRSP account administered by the Canadian Worker Co-op Federation (CWCF), which holds the bond on behalf of a retail investor with Concentra Financial.
Impact measurement is an important component that distinguishes retail impact investments from conventional products. Impact assessment and reporting remains a key challenge for investors, and while there are an array of emerging approaches, there is no consistent standard being used for retail impact investment.
- It is important to articulate how impact will be generated through the product, and examples include:
- Providing products or services that provide a positive benefit to a target population group (e.g. providing access to healthy foods at a lower cost for a low-income community).
- Providing employment to a target population group that would have otherwise been unable to access it (e.g. integrating people with mental health barriers into accommodated employment within a supply chain).
- Providing products or services that reduce the negative costs borne by communities or the environment (e.g. discovering a more efficient process for re-using discarded building construction materials).
- Providing products or services that positively influence an entire sector/system (e.g. creating new technology that reduces the cost of recycling for all companies in the sector).
Each of these strategies has a different set of objectives and goals around the nature and magnitude of the impact that is being created. In practice, approaches and standards around impact measurement have not yet been well developed nor consistently applied, within Canada or globally. However, there are now several examples of trends, approaches and standards that are gaining traction for impact investment:
- At the global level, several impact assessment and reporting standards are being commonly adopted among impact investors (see box 5.9). There is increasingly an emphasis towards the use of shared language in describing social and environmental impact (e.g. using IRIS), systematic assessment of performance at the company (e.g. using B Corp) and fund level (e.g. using GIIRS), and incorporating dimensions around materiality (e.g. as demonstrated in SASB).
- Thematic measurement approaches are becoming influential, as they can provide common measures that are comparable within a sector, and also allow for benchmarking among peers; one notable example is microfinance and the work of the Social Performance Task Force. There are also examples of multi-sector initiatives that have gained adoption among specific investor segments, such as the UN-backed Principles of Responsible Investing for institutional investors, and the Global Reporting Initiative for corporations.
- Information on environmental, social and governance (ESG) factors are becoming more readily accessible and used, as they are increasingly shown to be material and for investors. Prominent sources of ESG information for institutional investors include Bloomberg, Sustainalytics, and MSCI. In some cases, social and environmental measurement factors have some overlap with the measures that are being used for impact investment, through the are often important differences to consider.
- Qualitative and anecdotal information on individual and community beneficiaries has tended to be an important component of impact reporting efforts in impact investing. These can take the form of customized impact criteria on how individual companies within a portfolio are achieving their financial and impact objectives, as the Resilient Capital Program at Vancity has done. There are different levels of analysis involved, and as an example, RSF also seeks to understand how its engagement with an organization changes its understanding of the role of money within its local community. If possible, organizations should combine qualitative and quantitative data across their portfolio, as Calvert does in its reporting and annual Social Impact Report.
BOX 5.9: Selected examples of impact measurement approaches from case studies
- RSF Social Finance has created a questionnaire that focuses on understanding: a) how a social enterprise views and assesses its own impact on the community; b) how transformative an enterprise’s practices are with regard to people, place, and the environment; and c) how working with RSF has informed or changed the organization’s understanding of the role of money. These scores are then aggregated into an overall portfolio score that translates impact to investors.
- For each investment through the Resilient Capital Program, Vancity together with the business being financed jointly establishes a set of impact indicators that are unique to the focus area of each investee. This ensures shared buy-in and ownership over impact reporting, and helps the business to measure its own progress. Vancity offers support if needed, and maintains provides quarterly and financial reviews to investors.
- Calvert Foundation collects social and environmental performance data from each of its portfolio investments using a custom Social Performance Measurement Report template that incorporates industry-aligned indicators such as IRIS and the US CDFI Fund. Calvert Foundation combines these quantitative metrics with testimonials and stories collected from investees in an annual Social Impact Report for partner organizations and investors.
BOX 5.10: Selected standards and approaches
- Impact Reporting and Investment Standards (IRIS) – IRIS is the catalog of standardized metrics that allow impact investors to measure social, environmental, and financial performance. IRIS metrics provide a shared taxonomy where investors can identify, use and report on common measures.
- Global Impact Investing Rating System (GIIRS) – GIIRS is a rating system (similar to Morningstar or S&P rating) for businesses and funds, and focuses on social and environmental performance. It allows investors to access comparable and third-party verified data on social and environmental impact.
- B Corp Impact Assessment – B Corp is a certification issued to for-profit companies by B Lab, and assesses performance of the company in areas of governance, workers, community, the environment, as well as the product or service the company provides.
- Sustainability Accounting Standards Board (SASB) – SASB develops and disseminates sustainability accounting standards that help public corporations disclose relevant and material information to investors. The standards allow for performance comparison and benchmarking.
- Social Return on Investment (SROI) – SROI in a principles-driven approach to measurement that translates social and environmental outcomes into tangible monetary values. It seeks to compare the social value being generated by an intervention, and the investment required to achieve that impact.
Gaining Approval to Proceed
By this stage, a strong understanding of the product design elements should be in place, as well as initial understanding of the internal requirements for creating and launching the product. During this phase, the product development team would work on building the business case and preparing a presentation to the Board of Directors or Board Committee to gain approval to move forward to refining and launching the product.
At this stage, our research has noted that two important issues should be addressed:
- Board/Management Education: In the majority of cases we have researched, the Board and senior management teams have been previously exposed to impact investing. This exposure has either come through previous board education sessions, conferences and information sessions. It will be important to progressively engage the Board and Management on the key elements of impact investing, in advance of the presentation.
- Satisfying Regulatory Requirements: Given that this product may be unfamiliar, the Board will likely have questions on the regulatory requirements for the product. The credit union’s legal team should be able to provide a strong rationale and supportive evidence to support this.
 Barclays (2015). The Value of Being Human: A behavioural framework for impact investing and philanthropy.
 Ibid 2015; Morgan Stanley (2015). Sustainable Reality: Understanding the Performance of SI Strategies.
 Hope Consulting (2010) Money for Good: The US Market for Impact Investments and Charitable Gifts from Individual Donors and Investors.
 ibid 2010
 ibid 2010
 ibid 2010
 Morgan Stanley (2015). Sustainable Reality: Understanding the Performance of SI Strategies.
 Merrill Lynch, (2015). Impact Investing: The Performance Realities.
 Wharton University Social Impact Initiative. (2015). Great Expectations: Mission Preservation and Financial Performance in Impact Investing.
 Laing et al. (2012). The U.K. Social Investment Market: The Current Landscape and a Framework for Investor Decision Making. Cambridge: Cambridge Associates.
 The authors are grateful to Eugene Ellmen for his feedback and guidance on this section. All errors and omissions are the authors’ own.
 We note the distinction between product issuers (who create the structured product for issuance), and intermediaries or distributors (who sell the products to the retail investors). While credit unions play the latter role when they interact with their members, they can also act as product issuers, or choose to partner with other issuers.
 Banking Regulation versus Securities Market Regulation, Franklin Allen and Richard Herring. A working paper for the Wharton Financial Institutions Centre. http://finance.wharton.upenn.edu/~allenf/download/Vita/0129.pdf.
 Credit unions offer wealth management services, which include the distribution of securities, but these are managed under strict compliance practices of licensed dealers, such as Credential Securities and QTrade Financial. They are not considered credit union products.
 Information obtained from the National Crodwfunding Association of Canada at http://ncfacanada.org.
 For an updated list and comparative analysis, see: http://ncfacanada.org/equity-crowdfunding-regulations/.
 See http://communitybonds.ca/shop/the-guide/ and http://communitybonds.ca/shop/templates/.
 See http://capacitybuild.ca/services/community-bonds/.
 See http://www.solarbonds.ca/invest/solar-bonds-in-rrsps.
 See prior research conducted by Purpose Capital on Canadian impact investors, Retrieved from: http://www.purposecap.com/wp-content/uploads/Social-Impact-Measurement-Use-Among-Canadian-Impact-Investors-Final-Report.pdf.
 Purpose Capital has previously issued a guidebook on social impact measurement, Retrieved from: http://purposecap.com/portfolio/investor-guidebook-social-impact-measurement/.
 See the following study conducted by Arabesque and Oxford (2015), Retrieved from: http://arabesque.com/oxford-study-pdf.