Impact-Oriented Microfinance Investment Vehicles: A Preliminary Investigation on the Controversial Link between Performance and Stability

Social impact finance can foster economic and financial stability by promoting investments with social goals and non-speculative financial returns. The aim of this paper is to test whether Microfinance Investment Vehicles (MIVs) — labeled impact-oriented MIVs — contribute to economic and financial stability via their performance. Specifically, we test MIVs financial performance and risk-adjusted performance, assuming that: (i) financial returns below the market rate of return (MRR) are likely to contribute to economic stability via higher social and financial inclusion rates and via the promotion of microentrepreneurship; (ii) higher adjusted returns, characterized by low volatility, support financial stability. Results show that impact-oriented MIVs perform below the MRR only if we look at financial performance; when risk-adjusted performance is taken into consideration, impact-oriented MIVs outperform the market. We tested our results with a comparative sample of alternative MIVs aiming for social impact, but not labeled as impact-oriented. Results show that impact-oriented MIVs outperform the comparative sample, while their risk-adjusted performance is lower than that of alternative MIVs. The analysis shows that the market offers different investment options to investors, blending different level of financial return, risks and social goals, with different potential impact on economic and financial stability

The Credit Risk of Sustainable Firms during the Pandemic

This study investigates how the credit risk of more sustainability-oriented firms changes when national governments intervene in their economies to counterbalance the COVID-19 pandemic. For this reason, we examine how the credit default swap spread changes on a database of all listed firms—for which a credit default swaps (CDS) contract is available—in Europe and the United Kingdom during the whole year of 2020. We find that when national governments intervene in the local economies, the CDS spreads for these firms decrease more than for other firms. Furthermore, the CDS spread changes are more sensitive to those policies aimed at supporting household and business income during the pandemic rather than those policies related to stay-at-home measures and investments in healthcare. Our results corroborate previous theories linking firm sustainability, equity, and credit risk

Business Models for Sustainable Finance: The Case Study of Social Impact Bonds

Business models for sustainability (BMfS) are relevant topics on research agendas, given their orientation toward sustainability issues. However, traditional versions of these models are often ill-equipped at solving complex social problems. Cross-sector partnerships for sustainability (CSPfS) have been recognized as a new paradigm that mitigates the failure of traditional models. Impact investing, and social impact bonds (SIBs) in particular, represent an interesting field of research in innovative business models for sustainable finance, even though the literature does not consider SIBs within this broader field. We propose an exploratory study based on qualitative methods aimed at conceptualizing SIBs within the framework of BMfS and understanding how SIB collaboration varies across social sectors and geographical areas. Our study identifies three different models of SIBs characterized by the different degrees of collaboration between actors: (i) SIB as a fully collaborative partnership; (ii) SIB as a low-collaborative partnership; and (iii) SIB as a partially collaborative partnership. Our findings are useful to policy makers and practitioners involved in the SIB design, suggesting that a fully collaborative SIB model may stand a better chance of achieving the expected social impacts

Intellectual Capital Disclosure: Some Evidence from Healthy and Distressed Banks in Italy

The article investigates the intellectual capital disclosure of Italian banks over the years 2016–2017, applying the specific lens of healthy and distressed banks. To this end, we used content analysis and encoding techniques. The main results point out that intellectual capital (IC) disclosure is generally poor and that the intensity of disclosure varies slightly between healthy and distressed banks. Regarding the quality of disclosure, healthy banks present a higher, albeit modest, tendency to disclose non-qualitative and forward-looking information, maybe due to the fact that they are more focused on the strategies and the relationships with stakeholders as opposed to a more short-term approach of the distressed banks. To complement our study on healthy and distressed banks, we repeated the analysis focusing on bank size and independent directors. In this case, results do not show relevant differences in terms of IC disclosure. Hence, our findings suggest the need to consider banks’ IC disclosure as a strategic asset for increasing, among others, transparency and reputation

The gains and losses of face in ongoing intercultural interaction: A case study of Chinese participant perspectives

Given the small number of existing studies of face in intercultural settings and the increasing attention given to participant perspectives in face research, this paper explores the gains and losses of face as perceived by Chinese government officials during a three-week delegation visit to the United States of America. These perspectives were obtained from the group’s spontaneous discussions during regular evening meetings when they reflected on the day’s events. Several key features emerged from the discussions. Firstly, face enhancement was a primary goal for the visit – enhancement of their own face as a delegation, of the face of the Ministry they belonged to, as well as the face of their American hosts. Secondly, the delegates attempted to manage these face goals strategically. Thirdly, they spoke of face as a volatile image that could rise and fall sharply and yet endured across incidents, days and weeks. The paper reports on and discusses these participant perspectives in the light of recent theorizing on face

Mortality and pulmonary complications in patients undergoing surgery with perioperative SARS-CoV-2 infection: an international cohort study

Background: The impact of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) on postoperative recovery needs to be understood to inform clinical decision making during and after the COVID-19 pandemic. This study reports 30-day mortality and pulmonary complication rates in patients with perioperative SARS-CoV-2 infection. Methods: This international, multicentre, cohort study at 235 hospitals in 24 countries included all patients undergoing surgery who had SARS-CoV-2 infection confirmed within 7 days before or 30 days after surgery. The primary outcome measure was 30-day postoperative mortality and was assessed in all enrolled patients. The main secondary outcome measure was pulmonary complications, defined as pneumonia, acute respiratory distress syndrome, or unexpected postoperative ventilation. Findings: This analysis includes 1128 patients who had surgery between Jan 1 and March 31, 2020, of whom 835 (74·0%) had emergency surgery and 280 (24·8%) had elective surgery. SARS-CoV-2 infection was confirmed preoperatively in 294 (26·1%) patients. 30-day mortality was 23·8% (268 of 1128). Pulmonary complications occurred in 577 (51·2%) of 1128 patients; 30-day mortality in these patients was 38·0% (219 of 577), accounting for 81·7% (219 of 268) of all deaths. In adjusted analyses, 30-day mortality was associated with male sex (odds ratio 1·75 [95% CI 1·28–2·40], p\textless0·0001), age 70 years or older versus younger than 70 years (2·30 [1·65–3·22], p\textless0·0001), American Society of Anesthesiologists grades 3–5 versus grades 1–2 (2·35 [1·57–3·53], p\textless0·0001), malignant versus benign or obstetric diagnosis (1·55 [1·01–2·39], p=0·046), emergency versus elective surgery (1·67 [1·06–2·63], p=0·026), and major versus minor surgery (1·52 [1·01–2·31], p=0·047). Interpretation: Postoperative pulmonary complications occur in half of patients with perioperative SARS-CoV-2 infection and are associated with high mortality. Thresholds for surgery during the COVID-19 pandemic should be higher than during normal practice, particularly in men aged 70 years and older. Consideration should be given for postponing non-urgent procedures and promoting non-operative treatment to delay or avoid the need for surgery. Funding: National Institute for Health Research (NIHR), Association of Coloproctology of Great Britain and Ireland, Bowel and Cancer Research, Bowel Disease Research Foundation, Association of Upper Gastrointestinal Surgeons, British Association of Surgical Oncology, British Gynaecological Cancer Society, European Society of Coloproctology, NIHR Academy, Sarcoma UK, Vascular Society for Great Britain and Ireland, and Yorkshire Cancer Research

The impact of surgical delay on resectability of colorectal cancer: An international prospective cohort study

AIM: The SARS-CoV-2 pandemic has provided a unique opportunity to explore the impact of surgical delays on cancer resectability. This study aimed to compare resectability for colorectal cancer patients undergoing delayed versus non-delayed surgery. METHODS: This was an international prospective cohort study of consecutive colorectal cancer patients with a decision for curative surgery (January-April 2020). Surgical delay was defined as an operation taking place more than 4 weeks after treatment decision, in a patient who did not receive neoadjuvant therapy. A subgroup analysis explored the effects of delay in elective patients only. The impact of longer delays was explored in a sensitivity analysis. The primary outcome was complete resection, defined as curative resection with an R0 margin. RESULTS: Overall, 5453 patients from 304 hospitals in 47 countries were included, of whom 6.6% (358/5453) did not receive their planned operation. Of the 4304 operated patients without neoadjuvant therapy, 40.5% (1744/4304) were delayed beyond 4 weeks. Delayed patients were more likely to be older, men, more comorbid, have higher body mass index and have rectal cancer and early stage disease. Delayed patients had higher unadjusted rates of complete resection (93.7% vs. 91.9%, P = 0.032) and lower rates of emergency surgery (4.5% vs. 22.5%, P < 0.001). After adjustment, delay was not associated with a lower rate of complete resection (OR 1.18, 95% CI 0.90-1.55, P = 0.224), which was consistent in elective patients only (OR 0.94, 95% CI 0.69-1.27, P = 0.672). Longer delays were not associated with poorer outcomes. CONCLUSION: One in 15 colorectal cancer patients did not receive their planned operation during the first wave of COVID-19. Surgical delay did not appear to compromise resectability, raising the hypothesis that any reduction in long-term survival attributable to delays is likely to be due to micro-metastatic disease

The Impact of COVID-19 Lockdowns on Sustainable Indexes

This paper analyzes the response of sustainable indexes to the pandemic lockdown orders in Europe and the USA, contributing to both the research on the effects of the global pandemic outbreak and the resiliency of sustainable investments under market distress. Our results demonstrate that sustainable indexes were negatively impacted by lockdown orders; however, they did not show statistically significant different abnormal returns compared to traditional indexes. Similarly, our empirical results confirm that sustainable screening strategies (negative, positive, best in class) did not have an influence during such announcements. These results are robust across several model specifications and robustness tests, including nonparametric tests, generalized autoregressive conditionally heteroskedastic (GARCH) estimation of abnormal returns, and alternative events. The findings suggest that investors do not have to pay the price for the investments in sustainable assets when a bear market occurs; consequently, ceteris paribus, these investments appear suitable for financial-first investors. Such results have relevant practical consequences in terms of sustainable investment attractiveness and market growth

Contemporary Issues in Sustainable Finance. Creating an Efficient Market through Innovative Polices and Instruments

The 2030 Agenda for Sustainable Development aspires at a better future for all, thereby calling for an innovative and sophisticated financing strat- egy, with the dual challenge of mobilizing an unprecedented volume of resources, and leaving no one behind. Public action alone is not sufficient to address the scale and complexity of today’s global challenges. The Addis Ababa Action Agenda, agreed by United Nations in 2015, calls on gov- ernments, businesses, foundations and individuals to act in a more coordi- nated manner, in the pursuit of a new model for economic growth that enhances human well-being and preserves the environment. In response to international commitments, public actors are increas- ingly turning to the private sector as a potential ally in the pursuit of sus- tainable development, environment protection and poverty reduction. At the same time, mainstream investors and asset managers have become more attentive to the social, environmental and governance consequences of their operations. Market estimates vary greatly, depending on the defi- nitions employed, but the trend is clearly upward, as investors progres- sively incorporate extra-financial considerations and decide to actively pursue positive impact strategies. Independently of the labelling applied, public and private investors are turning to green, blended, social finance as a way to access new growth markets and respond to public expectations. While blending is driven by the need to increase the total funding available for the Sustainable Development Goals, green and impact finance aim to foster better ways to achieve these goals, through innovative approaches to social and environ- mental challenges. In practice, individual asset managers may adopt very diverse approaches to guide their portfolio allocation, ranging from risk mitigation (exclusionary screening) to impact creation (active ownership). As institutional investors engage further and deeper in sustainable devel- opment, their skill set, risk/returns assessment and incentive structures will need to evolve accordingly. While investors agree that financial and sustainable development returns can go hand in hand, the challenge lies in defining impact. Public and private organizations continue to measure different elements by different yardsticks, owing to the absence of common culture and language. The terms evaluation, monitoring, results and impact measurement are used interchangeably and without clear definitions. Complex governance patterns and multiple layers of intermediation deeply affect our collective capacity to understand the actual contribution of joint public and private investments to the global agenda. As the deliv- ery chain grows longer, it becomes more difficult for governments to exer- cise their steering and oversight function. The use of concessionality represents commercially sensitive information, which is often advanced as ground for non-disclosure. Evidence gathered by the Organisation for Economic Co-operation and Development (OECD) shows that most impact investors seek market rate returns, while the capacity to track social outcomes is uneven at best.1 Too often, public initiatives fostering impact investment also do not explicitly require an independent assessment of results actually achieved. The accountability lines become even more blurred when funding is pooled in collective investment vehicles. The 2018 OECD Survey on Blended Finance Funds and Facilities2 shed new light on their low propen- sity to track and publicly disseminate the results actually achieved through their operations. Almost two-thirds of the surveyed vehicles do not sys- tematically update the social or environmental performance indicators at the end of the investment and a third of them have no dedicated internal monitoring and evaluation function. For a non-negligible amount (12%), an evaluation has never been performed, nor is it planned in the future. When it is, only one in four of the ensuing reports is made public. The growing awareness of the need for private sector involvement has only intensified the urgency to enhance their degree of public account- ability. But the measurement of investment outcomes should not be con- fused with, and cannot replace, the ex post evaluation of public policies supporting those investments. Impact investors are mostly concerned by the need to estimate or measure outcomes for immediate investment decision or external reporting requirements, whereas public authorities need to ensure long-term policy learning based on actual, independently observed results. In order to harness the full potential of sustainable development finance, we cannot shy away from “the impact imperative”: a shared understanding of how we define and assess the results of our collective efforts towards sustainable development. In this rapidly moving context, the impact imperative should embrace all resources deployed in pursuit of sustainable development, independently of their labelling. In their capacity as policy makers, market regulators and development finance providers, public authorities have the ultimate responsibility to counter the danger of “impact washing”, by establishing and promoting integrity standards. We are at crossroads in terms of how governments and society as a whole are responding to the Sustainable Development Goals. Marginal adjustments will not be sufficient to deliver the billions of financing to the trillions of people that are in need. This shift in paradigm can only happen, if we redefine the way financial and economic markets function to pro-mote a more equitable and sustainable allocation of resources. All sustainable development finance actors share the responsibility for delivering the 2030 Agenda, and this implies converging towards a united vision on what we mean and how we assess progress towards sustainable development