May 15, 2020 | By Nate Wong and Audrey Voorhees

Nearly two months into quarantine, we’re seeing a shift in tone of company press releases from generic COVID-19 responses to something different. Beyond donations to relief and assistance, Target is investing over $300 million in employees with added wages, paid leave, and back-up childcare. Intel granted researchers and scientists open access to its global IP portfolio to pursue an end to the coronavirus pandemic. Actions like these no longer seem like window-dressing, but deeper commitments which may signal how some companies see themselves in a post-pandemic world. 

A newer model of capitalism is emerging– acknowledging that “companies, workers, customers and communities are the engines for achieving success,” says Kavya Vaghul from non-profit JUST Capital. Real commitments to positive social impact are taking center stage as leaders know publicity ploys alone will not attract customers, and certainly won’t keep existing employees or their supplier base safe and healthy. COVID-19 is a litmus test for corporate leaders to think beyond maximizing profit and instead reimagine their relationships with workers, communities, and natural systems. Reimagining will require hard-wiring and building impact into their DNA, not just tinkering on the edges of CSR or marketing. 

Enter born-socials with a playbook

Thankfully, a playbook for this new model of capitalism exists. “Born-social” companies put impact into everything they do, and model how to improve social and environmental outcomes while turning a profit. Patagonia and Ben and Jerry’s committed to community-oriented principles early. Warby Parker and Bombas embedded impact through non-profit partnerships. As corporate leaders make the shift from COVID-19 triage to strategic scenario planning, they should be intentional about how they re-form their corporate purpose, taking lessons from their “born-social” peers. 

(Re)define what truly matters and measure it. Born-social companies set clear environmental, social, and governance (ESG) goals alongside financial metrics. Sustainable footwear startup Allbirds’ includes carbon as an expense line item on the balance sheet, helping the company reach carbon neutrality before any corporates pledged to do so. Allbirds also plans to reduce the carbon footprint of each shoe produced by investing a portion of the $75M raised in their most recent funding round in regenerative agriculture for raw materials. Prioritizing environmental goals may reduce Allbirds’ profits in the short-term, but it will pay off as they scale a sustainable supply chain that supports their competitive advantage. Even in a constantly changing environment like now, ESG measures can be dynamic in a time of COVID-19. 

Create a stakeholder governance structure to “bake” it in. Leaders both loathe and respect governance. Its true value comes from how these structures help guide decision-making toward shared goals. The B Corp certification provides structure for born-social companies to demonstrate their commitment to creating public benefit and sustainable value for consumers, employees, and investors. Now, with over 3,000 certified B Corporation companies across 70 countries and 150 industries, these born-social companies have tied social and environmental performance to how they make decisions, who’s involved, and how they report it. Others created their own internal structures. Airbnb recently added a new Chief Stakeholder Officer role to execute its commitment to stakeholders in an effort to tie the company to specific principles, for example linking its compensation structure to guest safety and strengthening communities. As COVID-19 ushers in a surge of voluntary executive pay cuts, there’s an opportunity moving forward to better align compensation and incentives with holistic performance rather than stock price

Bring your entire supply chain into the picture. Born-social companies know that each link of their value chain is critical for their long-term success. Sweetgreen carved a fast-casual niche by building a transparent “farm-to-table” supplier network. Rather than just an RFP process, Sweetgreen sees sourcing as long-term partnerships that allow customers to trace back their foods to the farm it was sourced. As this pandemic has made clear, supply chains are inherently linked. Unilever set aside over $500 million for early payment to small and medium-sized suppliers and extended credit to small-scale retailers, reinforcing their long-term value to their operations.


Related Links


Not why, not how… but when

As corporate executives reckon with complex future demands, the question is no longer why value a stakeholder lens (last year’s Business Roundtable corporate purpose statement made that clear). And as the examples above highlight, it can no longer be a question of how to do it. Born-social companies are raising the bar for improving society while turning a profit. It’s just a question of when others will catch up. 

Successful corporate leaders see their actions today as a way to lay the groundwork for tomorrow. These vanguards will use this pandemic to re-tool how they treat their employees, work with community partners, create a resilient supply chain, and source in a regenerative manner. When we emerge on the other side of COVID-19, most if not all companies will need to embed social impact into their ethos to thrive. They will value stakeholders and measure their financial and non-financial performance. Leaders will re-form their corporate governance structure to align compensation with these new performance measures, emphasizing pay equity. Companies will integrate their supply chain more fully into their business with a sustainability-lens, including disaster response and continuity. Let’s start now. A more resilient and inclusive economy depends on it.

Nate Wong leads the Beeck Center for Social Impact + Innovation at Georgetown University. He previously helped launch social impact units at Boston Consulting Group and Deloitte Consulting LLP and is passionate about using business assets for the greater good. @NathanielKWong

Audrey Voorhees is a 2020 MBA Candidate at Georgetown University with a focus on private sector social and environmental impact who is passionate about designing innovative solutions across public, private, and social sectors. @VoorheesAudrey

January 22, 2020 | By Sheila Herrling and Audrey Voorhees

We are at an inflection point where the stakes are high to reimagine how capitalism and democracy work for everyone. Critical to that reimagination is a movement to evolve the thinking around the role of corporations in driving social impact at the scale that today’s challenges require. Milton Friedman’s notion that the only social responsibility of business is to maximize profit is increasingly being questioned by many, including investors, philanthropists, business leaders, policymakers, and perhaps most notably Millennials, who will represent the future workforce and consumers. People want to buy from, work for, invest in, and donate to companies that identify as social enterprises. Corporate CEOs stand poised to seize the greatest opportunity of their lifetime to deliver both greater financial returns and social returns at scale that could, quite literally, make the world a better, more equitable place.

That said, it’s complicated terrain. Accelerating the movement requires proof points of companies pursuing and achieving financial and social gains, how-to’s for those who are convinced of the value but don’t know where to start, and a solid understanding and appreciation of the counter-arguments.

As we set out to better understand the ideas, actors, flashpoints, and gaps in the corporate social impact (CSI) movement, we learned and built upon the work of others. You can see our full landscape analysis presentation here. As part of our work, we also pulled together what we feel is a “Must Read List” for anyone interested in the role corporates are and could be playing in driving social impact at scale and ensuring that capitalism works for all. We’ve done our best to share a diverse list of authors and viewpoints.

First, get situated in the early, foundational work; corporate social impact is not a new idea.

Second, make sure you understand all sides of the argument; you can’t advance a movement without knowing and truly appreciating all views.

On the pro side, we found these particularly interesting with…

…Compelling arguments 

…Key moments and decisions that served as flashpoints accelerating the movement

…A great new media series

…And many framed within the broader movement to reimagine Capitalism

On the counter-argument side, our thinking was informed by:

Third, understand the landscape of actors and activities that can drive the movement forward.

Once the foundational arguments were absorbed, we began to create the landscape of actors and plot them across a grouping of activities and historical flashpoints that were driving the movement forward. You can view that landscape analysis here. [link to the blog]. Among the gaps standing in the way of mainstreaming the movement, two seemed ripe to solve for in the near-term: how-to content for the already convinced, and the need for a uniform, involuntary impact measurement standard.

For those companies convinced of the need to embed social impact into their operations, there’s not a lot of public content out there. Here’s some we found useful and we hope to see more.

We are convinced that the movement will continue to stall without agreement on a uniform, involuntary impact measurement standard; here’s food for thought.

That’s our must list; for those wanting a deeper dive, here are some of the books on the topic that influenced our work. Dig in!

 

 


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Cover Photo by Nong Vang on Unsplash

 

January 15, 2020 | By Nate Wong, Sheila Herrling & Audrey Voorhees

As public trust of business and markets wanes, there’s an ever important call for everyone to play a critical role in reforming the system “so that it delivers prosperity for the many, rather than the few.” The Beeck Center has been observing the trends in the corporate social impact (CSI) space for the past few years as mainstream rhetoric has shifted from a shareholder to stakeholder-centric view of capitalism, most importantly seen in the recent United States Business Roundtable announcement

The question remains, where does the CSI movement stand and where do we go from here? As a “grasstop” player, the Center links grassroot and institutional efforts poised for action, and puts our energy toward the messy infrastructure work that can accelerate and sustain positive social impact movements like corporate social impact. It’s what we’d call “Impact at Scale.”


CSI Defined: The increasing recognition that corporations need to rethink their role in society and embed social purpose into their business model in order to manage risk, maintain market share, and secure competitive advantage. For those more bullish, you could be more specific that purpose will drive higher profit.


We set out to explore the topic – who is doing what – and to identify gaps in the CSI landscape that require concentrated action to accelerate impact at scale. My colleagues Sheila Herrling and Audrey Voorhees conducted this analysis to consider potential roles for the Center, but believe it serves as a “global public good” for all interested parties to help move this movement forward.  

Analysis highlights include:

  • The CSI movement arguably began over 12  years ago… with at least 11 key flashpoint events that have been foundational in building momentum, but there is still more work to do to tip the movement. 
  • 22 actors stand at the forefront of accelerating this movement and their efforts are worth looking out for.
  • There are 4 major gaps standing in the way of mainstreaming this movement that require attention.

We have 7 gap-closing ideas. Dive deeper here.

Our hope is that this will ground people’s understanding no matter where you may sit in the space – a corporation finding its position relative to others, a policymaker navigating the shifting system, or an academic seeking to teach business through a more current lens – and empower coordination.

With all of the Beeck Center’s work, we pair learners and expert practitioners. Watch MBA candidate and Student Analyst Audrey Voorhees’ capstone presentation as she shares her own journey and some of the research highlights.

Engage with us. 

This is our first pass at creating a comprehensive landscape analysis of the corporate social impact movement. As a community of practitioners driving impact at scale, we want this analysis to provide value along the learning continuum, from initiate to expert. How does this analysis resonate with you? And the market? We’d love your feedback.

The potential for corporates to drive social impact is scale is enormous. If partnerships can be leveraged, strategic alliances formed and critical gaps in the movement filled, this movement just might tip!

Sheila Herrling is a Fellow at the Beeck Center, where she pursues initiatives in impact investing and measurement, inclusive entrepreneurship and social innovation at scale.

Audrey Voorhees is a Student Analyst at the Beeck Center. She is currently pursuing an MBA at the Georgetown University McDonough School of Business.

Nate Wong serves as the Interim Executive Director at the Beeck Center, where he leads the Center’s pursuits and thinking on social impact at scale across its major portfolios. He previously helped launch social impact units at Boston Consulting Group and Deloitte Consulting LLP.


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