The Social Finance Dictionary

Preface: It is important to remember that these terms and ideas are relatively new in respect to the greater age of business ethics. It is in my opinion that we must approach these terms with a critical but opened mind. Regarding these concepts; most businesses are still in the development stage and these values need to be nurtured by us. We need to be armed with knowledge and willingness to participate. It's only by working together that we can make these ideas the new mandate for investment and corporate practice. 

A Lexicon Marathon


There are so many terms to describe "a business that is socially responsible." Unfortunately a lot of these terms have become interchangeable with one another; a few of which have developed a bad reputation and that reputation stains other progressive terms and concepts. 

 Venture Deli and Purpose Capital's 2012 Report Social Finance Awareness and Opportunities in the Canadian Financial Sector have identified several issues that are inhibiting the social finance market.

This report will explore those issues, and arm my readers with the linguistic tools they'll need to actively discuss this topic with their financial institutions.



ESG's (Environmental, Social and Governance) - This is a term used in capital markets that investors utilize to evaluate the social output of the companies they invest in from an environmental, social and governmental perspective. Please site this .pdf for more information. 




 SRI's (Socially Responsibly Investments) - An investment that is considered socially responsible because of the nature of the business the company conducts. Common themes for socially responsible investments include avoiding investment in companies that produce or sell addictive substances (like alcohol, gambling and tobacco) and seeking out companies engaged in environmental sustainability and alternative energy/clean technology efforts. Socially responsible investments can be made in individual companies or through a socially conscious mutual fund or exchange-traded fund (ETF).




Social Finance -A multidimensional approach to evaluating the risk / return of your investments that includes its social, environmental and governmental impact. 

Read More at:

(Make sure to read about my own personal experience trying to start a impact investment portfolio at RBC)





Fair Trade -  A set of standards and labeling to ensure fair practice and compensation along the production chain. The organization also monitors and evaluates consumer demand for fair business practice and adequate compensation to producers.

Fair Trade Canada Recommends: "When speaking generally about the concept, it's best to use "Fair Trade". When speaking specifically about the FLO system, use "Fairtrade" ("Fairtrade certified products", "Fairtrade certification standards", etc)."



 Impact Investing - "Impact investments are investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon the circumstances. Impact investors actively seek to place capital in businesses and funds that can harness the positive power of enterprise."


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BPO's (Business Process Outsourcing) -

"Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain their position in the marketplace. BPO is often divided into two categories: back officeoutsourcing which includes internal business functions such as billing or purchasing, and front office outsourcing which includes customer-related services such as marketing or tech support.


BPO that is contracted outside a company's own country is sometimes called offshore outsourcing. BPO that is contracted to a company's neighboring country is sometimes called nearshore outsourcing, and BPO that is contracted with the company's own county is sometimes called onshore outsourcing."


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ISSP (Impact Sourcing Service Providers) -

In other words ISSP is the strategy of harnessing the Internet to bring low-cost data management jobs to remote and impoverished communities.
A few are:
Digital Divide Data
Employees in Kenya, Cambodia and Lao. 

It looks for high school students who would “otherwise not have gone on to college,” explains Hockenstein, and offers them a four year work study program, during which they spend six hours a day working and the rest of the time pursuing higher education. DDD has graduated about 400 people who earn four times the average income in their countries. Because DDD spends more time with employees, it can provide them with deeper skills training. This allows them to take on more complex work, like electronic publishing. DDD also provides career counseling services.

Operating in Haiti, India, Kenya, Pakistan, Uganda and South Africa.

They must reinvest at least 40 percent of revenues in training, salaries, and community programs. They must hire workers who were earning less than $3 a day. (Once employed, they generally earn $5 a day, and often more.)


Horizontal Trading -

 A form of direct trade coined by Toronto social entrepreneur Michael Sacco.

Horizontal trade is a relationship between communities. There are many influences that help us to understand and describe horizontal trade, but basically it is a relationship based on friendship and mutual understanding. We work with the willing and with those who have initiative.  

Learn More:


Michael Sacco is the Creator of ChocoSol Traders: a Toronto based artisanal chocolate manufacturer.