In January 2024, SVX was hired by Employment and Social Development Canada (ESDC) to provide recommendations for the development of the Pilot Social Equity Lens Investment (SELI) Coding System. SVX was selected through a solicited proposal process conducted by ESDC, which requested proposals from key social innovation and social finance ecosystem stakeholders working on social equity.
This Pilot SELI Coding System is meant to be applied to investments made by wholesalers into social finance intermediaries through the Social Finance Fund. Its purpose is to define, categorize, and track the achievement of social equity and gender equality outcomes.
The taxonomy of this system is designed to be evergreen, allowing for continual evolution and adaptation to changing circumstances and understanding. This pilot represents a starting point, with plans for continuous refinement as the social finance ecosystem changes and our understanding of systemic inequities evolves.
This blog, the first of two in this series, will describe:
- What social equity lens investing (SELI) is;
- The goals, scope, and design process for the Pilot SELI Coding System;
- The groundwork that has already been completed within the ecosystem and by ESDC; and
- SVX’s role in the project.
Our aim with this series is to be transparent and responsive to our community, establishing a transparent channel on the recommendations provided to ESDC on developing the Pilot SELI Coding System. The Pilot will remain responsive to the social finance and social equity landscapes over the next 16 years.
How is the SFF integrating social equity lens investing (SELI) in its capital deployment?
This section has been adapted from ESDC’s official backgrounder on the SFF, which you can find here.
Through its Social Equity Lens, the Social Finance Fund (SFF) recognizes that the current financial and economic systems stand on historical contextual factors that have contributed to the marginalization and exclusion of equity-deserving groups. The design and objectives of the SFF acknowledge that:
- Entrepreneurs from equity-deserving groups encounter greater barriers to accessing social finance capital, exacerbated by intersecting identities that compound systemic disparities; and that
- Disparities persist across all levels of the traditional finance ecosystem, including exclusionary investment practices and the disproportionate burden of investment risks.
As a result, the SFF was developed through an intersectional lens of social equity and inclusion to address systemic bias, promote barrier removal, and ensure investments are directed towards supporting marginalized groups and diverse equity-deserving communities. This involves adopting an approach that integrates considerations and strategies to address intersecting inequities, spanning factors such as race, gender, sexual orientation and disability.
You can read more about the SFF’s social equity lens strategy and targets in ESDC’s official backgrounder on the SFF here.
SVX’s role
SVX’s role in this project involved the development of two core deliverables to ESDC:
- A database of criteria for measurement, including definitions and indicators representing a prototype taxonomy; and
- A set of implementation tools, including methodology, key questions, indicators, data collection methods, qualitative and quantitative information, and recommend survey tactics to be adopted.
Throughout the development process, we stayed connected with ESDC, wholesalers, and other stakeholders through regular check-ins, discovery sessions, and presentations for feedback. The goal with these two deliverables is to help inform ESDC and make recommendations on the direction of the Pilot SELI Coding System. This prototype will then be iterated upon by ESDC based on feedback and recommendations from the SFF wholesalers and key stakeholders before a public release anticipated for Spring 2025.
The Pilot SELI Coding System: Goals and Design Process
The SELI Coding System hopes to do the following with its pilot version:
- Enable wholesalers and intermediaries to classify investments as Social Equity Lens Investments (SELI) and Gender Lens Investments (GLI);
- Integrate intersectionality and adaptability to diverse contexts;
- Align with existing standards and practices to minimize reporting burdens; and
- Evolve over time to maintain relevance.
The Pilot SELI Coding System encompasses a broad scope of indicators designed to assess intermediary performance across various social equity metrics and dimensions. These dimensions include race, gender, visible and non-visible disabilities, and 2SLGBTQ+ identity. It addresses disparities faced by specific communities, including First Nations, Métis and Inuit peoples, language minorities, and immigrants and newcomers.
SVX’s Design Process
SVX’s approach involveds initial research, audit, and analysis of existing models, market data, and community input. To ensure viability of the final product, we engaged in ongoing communication and feedback from ESDC, the SFF wholesalers, and Common Approach.
As an organization, we also upheld the tenets of the WOSEN Design Principles to inform our work:
- Inclusive & Accessible — Empowering all through respect, fair treatment, and equal access by considering each participant’s lived experiences and barriers to inclusion when designing programs and selecting participants.
- Responsive — Designing programs to meet people where they are by engaging in two-way communication and facilitating feedback to adapt programs and meet the needs of participants. We seek feedback and input from participants to continuously iterate programs.
- Human-Centered — Understanding the emotional, physical and spiritual needs of the persons and communities we are looking to serve to create a space where everyone can be seen as their whole selves. By carving a space for empathy, our prioritize the experience over the tasks.
- Systems-Informed — Integrating systems-thinking, systems mapping, and systems navigation to acknowledge our place within the systems and understand the barriers and influences affecting the system. This broader view allows us to thoughtfully design programs that can create systems change.
- Decolonized — Acknowledging our place in the colonial system and the history of social entrepreneurship in indigenous communities and communities of color to create a space for knowledge sharing and decenter where knowledge is held.
- Anti-Oppressive — Recognizing the oppressions that exist in our society at all levels, attempting to mitigate their effects, and working to equalize the power imbalance in our communities by challenging systemic oppression and helping to navigate allyship and complex conversations.
- Ecosystem Approach — Understanding the entrepreneurship ecosystem and its barriers to foster meaningful relationships, building an ecosystem of support for all entrepreneurs of systematically oppressed communities.
Groundwork completed by Employment and Social Development Canada: Research and Community Engagement
Years of work, engagement, and thought led by the Social Finance Fund at ESDC have led up this point in the development of the Pilot SELI Coding System process. Notably:
- Discover and Research: Thorough review of research, stakeholder findings, and current frameworks was conducted, synthesizing this information with existing literature, peer models, market gaps, and opportunities.
- Collaboration with Criterion Institute: In 2019–2020, ESDC collaborated with Criterion Institute to conduct an analysis of power dynamics within the social finance sector through a literature review and stakeholder consultations This partnership informed the design of the SFF’s Social Equity Lens and the SELI framework, identifying systemic barriers to guide how social finance capital should be designed and allocated. Criterion identified a set of principles and process metrics for the Social Finance Fund, which have been adapted for the public here.
- Community Engagement Sessions: Dozens of key social finance stakeholders working on social equity and Social Finance Fund (SFF) wholesalers were engaged in Community Engagement Sessions convened by ESDC in November/December 2023. These sessions provided valuable insights, validating assumptions, understanding trends, and identifying gaps in current practices. Additional comments were also provided through one-on-one meetings and an online input form.
- Insights from these sessions have informed the design process, emphasizing the need for transparency, flexibility, acknowledgment of power dynamics, and decolonization efforts within the financial system.
Insights from ESDC’s 2023 Community Engagement Sessions
In Fall/Winter 2023, ESDC engaged with 45 attendees representing 37 organizations (out of 66 invited) to learn how the ecosystem is thinking about social equity lens practices, definitions, and measures of success.
The following overall key insights were central to the SVX team’s design consideration and approach to designing the Pilot SELI Coding System:
- The need for transparency, community informed participatory processes and strong collaboration by and between all actors in the social finance ecosystem
- The need for the coding system to be flexible and responsive to community needs and nuanced, context-specific measurements.
- The need to acknowledge and tackle power dynamics and bias as they arrive within investment processes and in the quest to support equity-deserving groups.
- The question of decolonization, and the need to decolonize the financial models, systems and approaches within which we operate. This indicates the importance of learning from Indigenous communities and ways of being and building relationships to decolonize capital flow and systems.
- The social finance ecosystem across Northern Turtle Island is emergent, and as such there is an acknowledged need for capacity-building support across every stage of the investment cycle and the employment of a non-transactional human-first approach.
- The need to build on existing frameworks and past work to create something intentionally more progressive, equitable, and repair historical systemic harms.
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In the following blog in this series, we will discuss:
- The research, design, and walkthrough of the SVX recommended Pilot SELI Coding System taxonomy; and
- The research, design, and walkthrough of the SVX recommended Pilot SELI Coding System’s implementation tools.
