The Rise of the Social Enterprise
2019: the year of social and environmental disruption…
On January 8, 2018, Blackrock CEO Larry Fink stated in his annual letter that “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society”. He went on to underline this rhetoric at The New York Times DealBook conference in late 2018 by predicting that in the near future, all investors will be using environmental, social, governance (ESG) metrics to assess the value of a company. Was Fink just having one of those years or does his opinion reflect the sentiments of the business community at large? This question is maybe best answered by reviewing the Deloitte Human Capital Trends 2018, entitled “The Rise of the Social Enterprise.” This enormous survey of business and HR leaders around the world was put together from a year’s worth of research, and, though the findings are broad there are some key data points to back up Fink’s comments.
1. 65% of companies surveyed now rate “inclusive growth” as one of their top three goals, eclipsing strategies like “growing market share” or “being the category leader.”
2. The need to create 21st century careers, improve the relevance of reward systems, focus on employee well-being and address the issue of longevity in the workforce, all rated as top 10 issues in the human capital agenda.
3. “Citizenship and social impact” were rated critical or important by 77% of respondents, and this topic was rated the “least ready” issue among the executives surveyed.
Point 3 is telling, in the way it demonstrates the gap that is often present between the social intentions of a company and the ability of the executives within that company to act upon those intentions. This is further highlighted within the research by Deloitte which found that C-suite executives are not operating or organised effectively to deal with this new socially conscious approach. This might partly be due to the fact that being socially focused by definition moves a business away from a siloed management structure to a model where customers, stakeholders, communities, business partners, and employees are all seen as contributors to the image, growth and profitability of a company. This shift reflects the growing importance of social capital in shaping an organization’s purpose, guiding its relationships with stakeholders, and influencing its ultimate success or failure.
How can technology help to bridge this gap? Corporate Social Responsibility (CSR) is one of the more recent areas of business to be automated by software, a sure sign that people within those departments already have their own methods and systems of work — and no matter how slick and effective a piece of technology is, it can only be as good as the level by which is accepted by users. But rates of software adoption in CSR maybe brighter than expected. One success story originates in India where Goodera, a CSR lifecycle and volunteering management platform founded in 2014 by Indian entrepreneur Abhishek Humbad, has since been through two funding rounds, expanded into the US market and now has more than 200 business customers across 90 countries. Goodera’s success can be credited in part, to legislative changes in India where in 2013, the government enacted Section 135 of the Indian Companies Act prescribing a mandatory CSR spend of 2% of average net profits but their rapid pace of customer acquisition has also been driven by the increased pressure for organisations to provide greater transparency with CSR spend. And on the subject of transparency is an ideal segue to talk about blockchain. Blockchain is a term intrinsically linked to Bitcoin and the smorgasbord of other cryptocurrencies that are out on the market. But this decentralised ledger system, known for transparency and accountability, now has a far wider reach and is being fast adopted by businesses with a social mission. A recent report from Stanford Graduate School of Business identified 193 projects exploring using blockchain for social good, more than 60 of which were launched in 2018. These include everything from businesses looking to improve health record keeping, to making supply chains more transparent and combating climate change.
One of the best examples of blockchain being used for social good is with the UN World Food Program’s (WFP) Building Blockspilot, which is using blockchain at refugee camps throughout Jordan. Refugees can buy food from grocery stores simply by looking at a small machine in the store, which contains an eye scanner. This reads the refugees biometric data and deducts funds from linked WFP vouchers. According to Robert Opp, Director of Innovation and Change Management at WFP, “All 106,000 Syrian refugees in the camps of Azraq and Zaatari now redeem their cash transfers on the blockchain-based system. So far, more than US$ 23.5 million worth of entitlements have been transferred to refugees through 1.1 million transactions.” By March this year the WFP is aiming to have an additional 400,000 refugees receiving their assistance through this blockchain solution.
And, as if the opportunities in blockchain weren’t compelling enough, the AI landscape brings a whole host of new developments and opportunities to the social sector. Google is arguably leading the pack and in October 2018 announced the AI for Social Good initiative, an ongoing project to apply core AI research and engineering efforts to social good projects. As part of the initiative, Google.org launched the AI Impact Challenge, a contest to support various AI for good projects with up to $25 million in funding.
There are certainly exciting times ahead for any individual or business, focused on social enterprise and Fink’s words may well spell the truth of how companies are measured in years to come. Whether working in the field on projects, or in front of a computer screen on new ways to solve social or environmental issues, the opportunity to innovate and make a difference has never been more accessible than it is today.
Matt Rickard is the co-founder of Task, a technology platform empowering organisations and individuals to create positive impact, and currently raising a seed funding round.
