The session focused on exploring how the SSE can revolutionise funding for India’s social sector. The main objectives were to discuss the role of finance strategies, encourage collaborations among stakeholders, and explore the SSE’s potential to bridge gaps between Non-Profit Organisations (NPOs), donors, and investors. These objectives were achieved through discussions that highlighted SSE’s current landscape, challenges, and potential solutions.

There was discussion around the need for NPOs to come forward and register with the SSE, despite challenges that similar platforms have faced globally. While SSE was officially declared in 2019, the first listings only appeared in 2023. However, out of 19,000 eligible NPOs, only 9 have registered, indicating a need for more outreach and capacity-building efforts. The success of SSE depends heavily on building trust and credibility, addressing regulatory barriers, and offering incentives that make it attractive for NPOs to engage.

Another critical point discussed was the importance of blended finance in facilitating social impact. Panelists noted that SSE can democratise funding by using financial instruments such as social venture funds and impact bonds, providing both financial returns and measurable social impact. By leveraging these instruments, the SSE can unlock new funding streams and encourage more investors to participate in the social sector. Mr. Mangesh emphasised the importance of bringing process orientation and discipline to NPOs, which can instil confidence in investors and enhance the credibility of listed organisations.

In terms of policy reform, the panel identified challenges in the current regulatory framework, particularly the complexity and volume of documentation required for NPOs to register and raise funds. Simplifying this process and increasing awareness among donors and investors were highlighted as key actions to promote wider adoption. Collaborations between internal and external stakeholders are essential to refining these processes and ensuring SSE’s success.

The session concluded with a call to empower NPOs to become independent, transparent, and capable of effectively engaging with donors. Workshops and educational initiatives were suggested to help NPOs navigate the registration and listing process, which will ultimately strengthen the SSE’s impact and legitimacy in India’s evolving social sector landscape.

The examination of blended finance focused on how it can bridge the gap between social impact and financial returns, especially within India’s development sector. The primary goals were to present global trends in blended finance, highlight case studies of social enterprises utilising philanthropic capital, and encourage discussions on integrating blended finance into participants’ initiatives. These goals were achieved through diverse case studies and expert insights.

One of the standout case studies was shared by Nirav Khambhati from The Blended Finance Company, which is building a $50 million facility to mobilise commercial working capital for MSMEs in the WASH sector. He explained the challenges these enterprises face when raising debt capital, mainly due to insufficient collateral or lack of lender experience in underwriting for this segment. The discussion further explored the broader ethical questions around the commercialisation of basic needs like health and education.

Another critical point discussed was the importance of blended finance in facilitating social impact. Panelists noted that SSE can democratise funding by using financial instruments such as social venture funds and impact bonds, providing both financial returns and measurable social impact. By leveraging these instruments, the SSE can unlock new funding streams and encourage more investors to participate in the social sector. Mr. Mangesh emphasised the importance of bringing process orientation and discipline to NPOs, which can instil confidence in investors and enhance the credibility of listed organisations.

Another interesting example came from Game Changers Law, which presented the use of convertible notes to facilitate soft debt for Me Meraki, a for-profit enterprise working with artisans. This example showed how private, non-philanthropic funds could be structured to benefit both social enterprises and investors.

The case study by Waterfield focused on a pooled UHNI fund that provided capital access to women’s joint liability groups, packaging the investment in a way that emphasised both returns and social impact, appealing to commercial investors without losing the focus on wealth generation for underserved communities.

A key takeaway was that structuring a blended finance program requires a strong Monitoring, Evaluation, and Learning (MEL) framework from day one to build trust among philanthropists and investors.

In short, blended finance, as demonstrated through these case studies, holds transformative potential by making social ventures more “bankable,” helping to align philanthropic goals with commercial returns, and driving capital towards achieving Sustainable Development Goals (SDGs). The panellists emphasised that future efforts should focus on bringing donors, investors, and social enterprises together through well-structured, impact-driven financial instruments.

The connection between commons and decarbonization underscores the urgent need to involve private capital in sustainability efforts. Leaders from banking, conservation, and corporate sectors engaged in a comprehensive dialogue about the crucial role private markets play in addressing environmental challenges, emphasising that sustainability goals cannot be achieved without their involvement.

A key point raised during the discussions was the significant financing gaps in ecosystem services. Existing financial models were deemed insufficient, with an urgent call to develop innovative mechanisms, particularly those that could transform biodiversity into measurable financial value. There was also a strong push for new financial tools, leveraging corporate social responsibility (CSR) funds and emerging platforms like Social Stock Exchanges (SSE). These tools were seen as crucial in bridging the current funding gaps and accelerating investments in ecosystem services.

The lack of clear business models and return on investment (ROI) for ecosystem services was another major issue. Examples, such as ITC’s sustainable agriculture practices, were highlighted to show how integrating community benefits into business models could provide both environmental and financial returns. The concept of monetizing ecosystem services was underscored as a necessity to incorporate their value into long-term business strategies.

One of the standout insights was the issue with CSR funds. Despite the substantial allocation of approximately ₹40,000 crore annually in India, very little of this goes toward biodiversity or ecosystem services, largely due to the short-term focus of these commitments. For meaningful impact, these funds need to be directed toward long-term projects that span at least 10-15 years. Catalytic philanthropic funding and government support were seen as essential to facilitate the transition toward market-based financing models.

The role of technology and data in promoting transparency, cost-efficiency, and traceability in ecosystem services also featured prominently. Trusted data could drive scalability while lowering operational costs, especially in rural settings where technological access remains a challenge. At the same time, the discussions emphasised the need for policy and regulatory clarity to create favourable conditions for private sector investment in these services.

One of the primary challenges discussed was the difficulty in measuring and reporting ecosystem services like biodiversity and water due to the lack of standardised metrics. Addressing this would be crucial for ensuring accountability and facilitating private investment. Overall, the session highlighted the need for collaborative partnerships, public-private initiatives, and innovative financial models to overcome the challenges in funding ecosystem services and scale successful projects.