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Building public benefit and shared value into business was a presentation delivered at the Schulich School of Business Greenedge Conference 2011. The presentation covers the motivation for public benefit
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Building public benefit and shared value into business:Models in Canada and around the world
Net Impact: GreenEdge 2011 ConferenceYork University, Schulich School of Business
Summary
• Motivation• Case Studies
o Affordable Housing Modelso Local Modelso Global Models
• Looking Ahead
Motivation
We are faced with seemingly intractable social and
environmental problems at a global and local level.
1. Poverty2. Climate change
3. Government debt4. Economic transition
Our Challenges:
Sandy Lake First Nation 2008
Kenya 2009
Ottawa 2009
Windsor 2010
The Cost:
Billions & trillions of dollars.
Hundreds of thousands of lives.
We have a fundamental responsibility to act. We
need to change the way we live and
the way we do business.
An agenda driven by:
ConsumersThought LeadersPolitical Leaders
InvestorsVentures
Professor Michael PorterBishop William Lawrence University Professor at Harvard Business School
“In recent years business increasingly has been viewed as a major cause of social, environmental,
and economic problems. Companies are widely perceived to be prospering at the expense of the
broader community...The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value
for society by addressing its needs and challenges…The purpose of the corporation must
be redefined as creating shared value, not just profit per se. This will drive the next wave of
innovation and productivity growth in the global economy.
”The concept of shared value recognizes that societal needs, not just conventional economic needs, define markets. It also recognizes that social harms or weaknesses frequently create internal costs for firms—such as wasted energy or raw materials, costly accidents, and the need for remedial training to compensate for inadequacies in education. And addressing societal harms and constraints does not necessarily raise costs for firms, because they can innovate through using new technologies, operating methods, and management approaches—and as a result, increase their productivity and expand their markets.
Market Potential
Local: $30B
HNWIs: $120B
Global: $400B - $1T
Case Studies
Case Studies in Affordable Housing
New York City Acquisition Fund• Goal: support the development of 30,000 low
income housing units in New York City to address housing shortage
• Target: for-profit and non-profit affordable housing developers to refurbish or build units
• Fund size: ~$200 million
Serviam Gardens: $3.6 million loan an 83-unit complex for low-income seniors in the Bronx via NYC Acquisition Fund.
Regent Park Revitalization: Public benefit financing and enterprise focus
Social Hiring:SCP & Active Green & Ross
Partnership Model: Local
Social Venture Exchange (SVX)A local, impact-first market connecting social ventures, impact funds, and impact investors in order to catalyze new investment capital geared towards improved social and environmental outcomes.
• Public benefit partnership led by Social Innovation Generation (SiG) at MaRS and the TMX Group Inc. with the support of the Government of Ontario
• Focus on debt and equity offerings for non-profit and for-profit ventures reducing poverty, increasing opportunity and enhancing sustainability (affordable housing providers to solar power firms)
• private online market platform with venture listings, fund listings, a resource centre, investor collaboration tools, and a service provider listing modeled on private markets in the US and other evolving impact market platforms
Social Purpose Business:Turnaround Couriers
Global Innovation Model
Partnership Model: Global
Mission: to bring health through food to the largest number of people in Bangladesh
INVESTMENTREINVESTMENT
RETURN/REFUND LOCAL DEVELOP.Value: Combating malnutrition through the sale of a low cost yogurt cup.
Base of the Pyramid(BoP) Model
Finestrella: Regional mobile phone company focused on low-income customers.
Challenges
• Skeptics• Getting the business model right: hiring and
training, authenticity, fit• Entire mission vs. focused brand• Balance: Investor demands, profitability and
patient capital• Philosophical: basic service delivery by
government or private sector• Impact measurement
Looking Ahead
LegislationSector agnostic start-upsCorporate social innovation
Significant growth
Thank You
Net Impact: GreenEdge 2011 ConferenceYork University, Schulich School of Business
