Corporate social responsibility, or CSR, accounts for an estimated $18 billion in corporate spending by Fortune 500 companies. That sounds like a big number until you consider the estimated $12 trillion that these same companies spend each year to run their operations.
“Intrapreneurs” and innovators from within corporations are going beyond CSR, to pursue a range of social impact strategies to drive real value for their companies.
Innovative companies are finding ways to drive social and environmental impact while boosting profitability – by increasing revenues or decreasing costs in core functions of making and selling products and services, says Scott Saslow of One World Training and Investments.
At One World’s Innovations for Corporate Social Impact Summit in Redwood City, California, last month, leaders from Pearson, Equinix, Atlassian, Salesforce, Gap, Moody’s Analytics and other companies identified innovative practices for corporate social impact.
Global companies are applying financial and intellectual capital by backing impactful startups and small businesses, which drives employee and customer satisfaction. This can also help companies unlock new markets and new product and service categories.
Partnerships, for example, can allow larger companies to benefit from the market sensing capabilities of smaller startups and social enterprises, said Pamela Roussos of Miller Center for Social Entrepreneurship at Santa Clara University. Miller Center recently partnered with GE to run an accelerator for maternal and child health entrepreneurs in Africa.
Kari Dohn Decker said JP Morgan Chase & Co. has benefited from its Financial Solutions Lab program, a community of startups building fintech solutions for underserved communities in the U.S. Last year, Salesforce launched a $50 million in-house venture impact fund to invest in startups using Salesforce technology to address some of the world’s biggest problems, said Salesforce’s Sunya Ojure. Moody’s Analytics’ John Baer said the firm has built a product to improve lending to small businesses.
Companies are finding ways to boost their social and environmental impact through new products and services. Beau Cronin said The Data Guild, a venture studio in San Francisco, is developing data-driven products for complex, underserved sectors.
Companies can also create opportunities for marginalized communities through their choice of vendors. Murali Vullaganti founded PeopleShores, for example, to connect disadvantaged young adults with technology and business process outsourcing services for corporate clients. These services may be obtained at a discount.
Deep corporate commitments to social impact can attract top talent and boost employee engagement and retention rates. The best save real dollars in recruiting and training costs.
From its early days, software developer Atlassian has pledged 1% of their equity, employee time, and product to philanthropic efforts, said Atlassian’s Jessica Hyman. The firm contributions increase as the company grows. To encourage companies to give back no matter what their stage or size, they founded the Pledge 1% movement — a global network of more than 4,000 members in 95 countries — along with Salesforce and Rally.
Equinix, an internet services company, is moving towards use of 100% alternative power sources, said, Equinix’s Brian Thomas. Apparel company Gap has invested in diversity & inclusion programs, including This Way Ahead, an internship program for low-income teens.
Senior leadership, especially in the early days, can often be difficult to convince about the benefits of investing in social impact, said the group. They emphasized the importance of framing the long-term benefits of such programs to executives so that companies can build their employee and customer brand earlier rather than later.
Reframing corporate impact
Companies are going beyond CSR to drive impact by tapping internal pools of talent, capital, and innovation. With a wide range of opportunities, companies need to be strategic about what will work best for them.
Peter Van Camp, interim CEO at Equinix, acknowledged the challenge of profitability in seeking impact, citing Equinix’s financial responsibility to its shareholders. He also noted inherent opportunities in corporates seeking impact — a chance for companies to invest in their future customers, employees, and interconnected global community.
Today’s forward thinking companies are rising to the challenge, creating a world where the profitability of social impact is a important component. “When a corporate impact initiative is profitable, it catches the attention of management,” says One World’s Scott Saslow. “It is then more likely to receive support to become sustainable, and ultimately scalable. That is how you drive impact.”
Karen Mac is a recent graduate of Santa Clara University and a volunteer at One World Training and Investment.