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

Mario La Torre,Annarita Trotta,Helen Chiappini,Alessandro Rizzello

doi:10.3390/su11071887

Abstract

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.

Highlights

Over the last two decades, the business model concept has become increasingly relevant [1] with researchers and practitioners exploring and developing innovative formulas [2], including business models for sustainability (BMfS)
EmInpirtihciasl Fseinctdioinngswe contextualized social impact bonds (SIBs) under the BMfS framework, and we provided an undeIrnstathnidsinsgecotfiohnowweSIBcocnotlelaxbtuoaralitzivede aSsIpBesctus nvdareyr atchreosBsMsofcSiaflrsaemcteowrsoarkn,d agnedogwraephpicroalvaidreeads.an understanding of how SIB collaborative aspects vary across social sectors and geographical areas
How the collaboration may vary across social sectors and geographical areas is discussed below, looking at the results and issues related to collaborative processes and dynamics in SIB design and structuring as well as the social and financial dimensions

Summary

Introduction

Over the last two decades, the business model concept has become increasingly relevant [1] with researchers and practitioners exploring and developing innovative formulas [2], including business models for sustainability (BMfS). Several academic studies have been published on BMfS, and industrial practices have explored the issue to identify sustainable business model archetypes [3]. Despite this growing interest, a very important research gap still exists, with respect to “how sustainable business models function and are applied in the real world and what determines their success (or otherwise) in the market” [4] The CSPfS are an important new paradigm able to address complex social issues They are aimed at mitigating the failure of isolated governmental or social sector organizational actions [6,7,8]. Multiple actor collaborations are a fundamental element in BMfS [9], though there are currently few studies in the literature

Methods

Results

Discussion

Conclusion