There is some dialogue in the impact sector that the words “social enterprise” or “impact investing” are merely words that help ideas transition.
As one example, so-called impact investors try to convey that all investments have impact. Based on this notion, it would seem redundant to call something “impact investing” rather than “investing”. The underlying idea is that impact investing helps move what is known as investing today to another, more generally accepted, idea of investing that involves being mindful in choosing investments that create positive social and environmental impact. Otherwise, they warn, we jeopardize quality of life because any other investment would have a negative impact.
Similarly, “social enterprise” has been thrown into the mix along the likes of corporate social responsibility (CSR), sustainable business, and responsible business by those tinkering with capitalism and the role of business in society. But in doing so, these terms have been served up as a side dish rather than fundamentally changing the function and approaches of a business.
In the case of CSR, for instance, a company may redirect some type of value to communities which may have nothing to do with their core function. Besides, that core function may be something that produces negative impact. Even with social enterprise and impact investing, these terms have so far only managed to segregate a certain type of business and investment.
Is it even possible to push for a truly different vision of the economy? How would that be achieved?
Yasmina Zaidman, who leads efforts to engage with corporate partners as Director of Communications at Acumen, a nonprofit financier and supporter of social enterprises focusing on poverty, offers some suggestions on changing the system. Realizing that people “held a real skepticism about whether corporations could help build a more equitable world”, she explains what is needed:
It is not enough to say that [Acumen’s] work brings real benefits to social enterprises and the people they serve. Our goal is to change the systems that have, in so many cases, led to the inequality and lack of options that we see. So, to be successful, we need to partner with corporations that are also interested in changing systems.
In the summer, Acumen announced a partnership with The Dow Chemical Company as part of their policy to engage corporations. In this partnership, Dow employees offer their expertise to help Acumen’s portfolio companies. This may seem surprising given that over the years, Dow has been caught up in a number of controversies in areas such as human rights, the environment, and employee safety, building an impression of disregard to society. But these conversations, these partnerships, these engagements, despite what friction may come of them, must be had to create systematic change. As Zaidman goes on to write:
We see more and more companies willing to go outside their comfort zone and partner in creative ways in order to achieve breakthroughs. As an example, we are now working with companies based in both the US and the countries where we invest to provide financial and in-kind support to social enterprises that seek to scale. These companies are looking beyond traditional CSR to find new potential allies in the development of more inclusive and sustainable business models. But these are the early days of exploring the potential for collaboration between corporations and social enterprises.
As it would seem, the days are still early in this approach to challenge old systems. Will we see the day when “social enterprise” becomes obsolete, giving way to a truly more inclusive and sustainable “enterprise”?
I believe we will discover a whole new set of solutions by engaging in this discussion from a position of openness and respect, even as we hold ourselves accountable to the people, and not the systems, with which we stand.
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