Corporates can remodel business into a force for good – here's how
Ahead of this week's EVPA Annual Conference, speaker Daniel Nowack – managing director at Yunus Social Business – shares a preview of his session and breaks down some of the ways corporates and their foundations can support systemic change.
This year, the annual conference of the European Venture Philanthropy Association (EVPA) seems to be at the cusp of systemic change. In August, more than 180 executives pledged their commitment to creating value for all stakeholders, not just shareholders. The Fridays for Future climate protests are creating much-needed urgency for environmental action. And, finally, more and more individuals within companies are driving their organisations towards a people- and planet-positive strategy.
We at Yunus Social Business have spent most of 2019 researching the journeys of these individuals, these social intrapreneurs. Together with academic partners like INSEAD and practitioners like Porticus Foundation, B Team, Schwab Foundation or the League of Intrapreneurs, we have identified more than 100 inclusive initiatives at corporations. We have interviewed over 50 of them. We have set up quantitative experiments and studies to measure the transformative effect of corporate social business. And we have mapped out existing programmes for social intrapreneurs.
So, as usual, I bring many questions with me to the conference. But this year, together with Sally Uren from the Forum for the Future and Karoline Heitmann from EVPA, we will also be providing some insights from our experience and research to answer the key question: “Can corporate social investing turn business into a force for good?”
Five ways corporate foundations can support systemic change
Corporate foundations and, more recently, corporate impact investors, are a strong source of financing for social initiatives around the world. I haven previously outlined how leading corporate foundations think about their role and how they can transform the core business of their parent company. It boils down to five points:
Partnerships with social entrepreneurs and social innovation
- De-risking social innovation: Providing grants for social business models that need to show proof of concept to qualify for commercial capital.
- Creating access: Helping social ventures to become integrated into your company’s value chain as suppliers or service providers.
- Non-financial support: Using your assets as a company to provide non-financial support in the form of mentoring, expertise or assets.
Partnering directly with core business
- Transparency & accountability: Create transparency about your parent company’s environmental and social footprint. Hold it accountable for negative impacts but also help it design concrete solutions. Take for example C&A Foundation, which has been working to shed light on the textile sector for years.
- Visionary social thinking: Corporate foundations are at the forefront of change – societal change. They can help their parent companies to shape strategy by understanding their social relevance for decades to come. For example, the Impact Accelerator of MAN Truck & Bus is exploring the frontier of mobility – predicting the traffic jam before inventing the automobile.
Foundations can create transparency about the parent company’s environmental and social footprint: C&A Foundation has been working to shed light on the textile sector for years
At the same time, the role of Corporate Impact Investing (CII) is evolving and growing in importance. Danone, for example, has positioned its danone.communities fund at the crossroads between its sustainability strategy and its innovation strategy, while systemically involving corporate employees as mentors to its portfolio, which in turn drives mindset change within the organisation. Pearson has established its Affordable Learning Fund (now Pearson Ventures) to strategically invest into startups that provide affordable access to education across Asia and Africa.
Systemic change through partnerships
Clearly, private companies can offer much more than just cash. In fact, one of the most significant impacts that companies can have is on social innovation is by buying from social entrepreneurs or otherwise integrating them into their value chains.
Today, social entrepreneurs are growing in size and maturity, becoming valid partners for corporations. A few companies have started to realise this opportunity. IKEA, for example, has created a new entity – IKEA Social Entrepreneurship B.V. – to partner with social entrepreneurs and integrate them into IKEA’s value chain as the company moves towards becoming people and planet positive. It partners with social businesses like RangSutra, a women’s cooperative in India, and actively pushes to learn from these engagements for its core business. And it replicates early successes in its business around the world.
Systemic change from within
Social intrapreneurs act as entrepreneurs within their own company to establish social startups. Initiatives like BASF’s SAFO alliance, for example, has reached over 100m people worldwide in battling malnutrition. Essilor’s Eye Mitra is giving income opportunities to over 6,000 rural entrepreneurs in India that serve thousands of people with poor eyesight.
These initiatives are an incredible source of innovation. But most importantly, they help create a tangible example of their company’s purpose. They spill in relevant market knowledge and a new sense of innovation. And they are a constant source of new talent.
BASF’s SAFO alliance has reached over 100m people worldwide in battling malnutrition
The intrapreneurs behind these navigate the challenges of entrepreneurship within companies – like short-term focus on quarterly results, lack of a qualitative metric system for social innovation and a constant battle for resources and visibility.
However, when supported by C-level executives and when aligned with the company’s core strategy, these initiatives can have systemic effects on their company’s strategies. Danone’s transformation, for example, has started as a joint venture with Grameen, which inspired the danone.communities fund, which led to the redefinition of bonus systems to link with impact – and ultimately led to Danone’s efforts to be certified as a B Corp. Similarly, starting with its Arogya Parivar project, Novartis has started a range of social business initiatives that have created significant impact and led to rethinking how Novartis does business.
A new era of doing business
We will share more examples and insights at the EVPA Annual Conference. But already now, we are incredibly excited to see more and more inspiring examples of true change amongst business leaders. With a mix of social intrapreneurship, corporate partnerships with social businesses and a new era of corporate social investing, we can turn business into a force for good.
Find out more about the session, 'Can corporate social investing turn business into a force for good?' in the EVPA Annual Conference agenda.
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