The System Isn’t Broken, This is How it Was Built. How do we Rebuild?

By: Brady Press

This post is part of a series highlighting sessions from the SOCAP 2020 Virtual Global Impact Summit. Continue reading for information on impact investing and the future of capitalism.

Key Takeaways

• Milton Friedman’s stance that businesses exist solely for profit is not working for us. The current capitalist system can be changed through storytelling, policy change and more conscious investment and consumption
• We need to create a legal corporate framework so all companies can act like a B Corps with purpose, responsibility to all stakeholders, short and long term commitment and the transparency to measure, manage and report impact
• There are three main actions we can take in this moment to really shift the culture of money: know where your money is invested, start moving into impact investing and interrogate every decision you make

Summary

Capitalism needs a new operating system. Every problem the SOCAP community and beyond is trying to solve around the world requires breakthrough direct actions and structural changes in the incentives that drive economic behavior. Without culture and policy shifts, there is no systems change. Based on insights gleaned from 300+ global leaders, B Lab is ready to reimagine and redesign its economic system in service of justice, dignity and equity. This session offers perspectives from four leaders as they address behavior change, culture and policy.

Speakers

• Marcel Fukayama, Executive Director, Sistema B International
• Victoria Gathogo, Head of Partnerships and Africa Expansion, B Lab East Africa
• Holly Gordon, Chief Impact Officer, Participant
• Morgan Simon, Founding Partner, Candide Group

Session Notes

Opening: Victoria Gathogo, Head of Partnerships and Africa Expansion, B Lab East

• This has been a year of environmental degradation, poverty, racial injustice, leadership that’s failing us and more. We all seek changes from a cultural, behavioral and policy lens
• Africa is rising; we are the biggest free trade area with over 1.2 billion people and 60% of those people are under 25. Yet, for example, only 3% of the economy in Senegal is in formal employment
• There needs to be a decade of action and a decade of African leaders who are not thinking about corruption, who are not waiting for the government, who are taking responsibility with the people and companies they have

How can both the system and the culture change in a way that better creates harmony?

Holly Gordon, Chief Impact Officer, Participant

• Participant is a film production company founded by Jeff Skoll to tell stories that inspire social change.
• I believe storytelling is essential to drive long-term change. It can help create a shared consciousness and beliefs. We often work in data, but stories do what data can’t — make issues feel personal and workable
• We all need to tackle these together and need more participation

AI and tech have allowed us to be aware of stories globally. Moving forward, what do you think storytelling will mean for us?

Holly Gordon, Chief Impact Officer, Participant

• We have an opportunity to tell stories that lead to what we’re calling a re-set — the pandemic created a moment of pause and one where we can actually imagine the future. Never before has more change been needed, but I also believe more change is possible than ever
• I believe with our interconnectedness of our communities, we have the potential to bring our global ideas into our communities and drive change at the community level
• By sharing stories globally we can inspire collective action at the grassroots level and hopefully accelerate the kind of change we need

How can we all inspire people towards this inclusive and regenerative economic system and avoid preaching to convert people?

Holly Gordon, Chief Impact Officer, Participant

• I have learned the way you can accelerate and grow change, if you are a change leader yourself, is to find film and art tools and bring those into your community and set time with groups of people to enjoy the art and have a conversation about the activism (ex: American Factory, Imperative 21 — a network of 17,000 businesses committed to changing the economy)
• We need the converted to preach in their communities for those who don’t know where to go. Use the art to inspire conversations in your community

What needs to happen to drive policy change and companies and organizations coming together?

Marcel Fukayama, Executive Director, Sistema B International

• I want us all to use an economic system that is inclusive. We need to build infrastructure for cultural shifts and the power of policies to build an institutional framework that is aligned with society’s interests and our planet’s needs
• At B Corps Global Movement we believe in the power of market-driven solutions to solve social and environmental problems
• There are currently 3,500 certified B Corporations from 70 countries and 150 different industries with the one goal of redefining success in business — but how can we power all of the 125 million companies (according to the World Bank) to behave like a B Corps with purpose, responsibility to all stakeholders, short and long term commitment and the transparency to measure, manage and report impact
• We need to create a legal corporate framework so all companies can act like a B Corps. There are 15 different countries now discussing legislation to for this legal corporate framework and to help administrators and investors align their incentives and interests with the new economy

How you encourage people within the SOCAP universe to get more politically active and engaged?

• Combine the walk with the talk. Driving capital to these initiatives is a political act, especially during these times when we have institutions advocating against important anti-inequality policies and the climate crisis
• Secondly, ask yourself about your power — how is my money nurturing the economy? We need to organize ourselves to understand what our money is supporting

What do you feel is necessary for this change?

Morgan Simon, Founding Partner, Candide Group

• Building bridges between finance and social justice. I feel we have had an incredible reckoning in really looking at the culture of money and finance — and whether we’re recipients of that
• What is our role in the finance community in either upholding white supremacy or fighting back against it? There are three main actions we can take in this moment to really shift the culture of money.
• 1) We have to know where our money spends the night — too many of us think when we put our money in the bank it’s sitting in a safe, when in reality it’s often off financing things like fossil fuels and private prisons that are really against our values — whether you have $100 or $100 million in the bank, you have the opportunity to influence that conversation
• 2) We need to start moving into impact investing and being more conscious consumers of impact investing (this is getting easier — every company has some type of ESG option), but in the same way we had to learn the difference in the grocery store of what’s the cage free egg versus the organic, we need to be interrogating deeply what is the systemic impact that these investments are having. Is it simply wealthy people getting to decide the fate of others? Are we making it slightly less difficult to be poor or are we actually shifting structures right? At Candide Group, over half of our assets are deployed into companies/funds that are led by women and people of color
• 3) We have to have a commitment to change and interrogate every decision we make and make sure we’re building new culture not reinforcing old culture. There is absolutely no excuse. In today’s market you have to go out of your way to not have a diverse portfolio
• We need to actively interrogate every decision. For instance, there are rules around first-time fund managers that you can’t invest in someone if they don’t have $200 million under management and five years as a team — this is going to exclude the majority of women and people of color
• Some of these criteria we don’t think are about equity, but they are. How does implicit bias get integrated into finance?
• The more we know where our money is being spent, the more we’re making sure that impact is real

Can you give examples of bright spots? Companies, new criteria, or 1–3 first steps for how to get involved

• All investments listed on Candide Group website. Macro is a good one (created the film Just Mercy) and Bitwise (is building inclusive tech ecosystems, bringing more value to the tech industry)
• This is for everybody — start asking more questions; we’re all connected to money one way or another. Ask what is the ESG option and how is that actually encouraging community accountability?

Calls to Action?

Marcel Fukayama, Executive Director, Sistema B International

• I want to emphasize the power of Imperative 21 and list the 3 main imperatives for this new economic system: interdependence, justice and stakeholders access

Morgan Simon, Founding Partner, Candide Group

• Talk to walk. This is a time where many folks have made deep personal commitments — if women and people of color make up the majority of the world and investments don’t represent the culture, there’s a problem. We need to head to long-term action

Holly Gordon, Chief Impact Officer, Participant

• The next 10 years are a new paradigm for participation and the most important thing is to exercise your power and agency as an individual to contribute to our interdependence. Decide where you want to make a difference and sit down and make a 3-step plan and the rest will roll from there

Want to know more?

For more SOCAP content, visit full session recordings on YouTube or see here for other Starting Up Good summaries of our favorite recordings.