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The Road to Corporate Sustainability is Through Social Entrepreneurship 

A new paradigm is emerging for corporations and social enterprises to drive impact at scale. Post-2020, companies have woken to the fact that minimalist models of corporate social responsibility (CSR) and merely managing environmental, social and governance (ESG) risk strategies, no longer serve. Well-intended CSR strategies not tied to a company’s core business, or those where positive social impact is missing or hangs by a thread on obscure ESG criteria, have become passe. Unlike previous economic retrenchments where corporate sustainability was quickly tossed into the back seat when profits took a hit, customers now expect companies to look for innovative ways to integrate social equity and impact into their business models. Partnerships with social entrepreneurs is a path to do this.

As Larry Fink, Founder and CEO of Blackrock, notes in his 2021 Letter to CEOs, companies with better sustainability and inclusion profiles perform better than their peers. This “sustainability premium” is reflected not only in broad-based indexes, but within industries across the board. Dots have been connected between corporate commitment to social justice, inclusion, climate action, and “success,” whether measured in terms of profits, social impact, sustainability or high-performance teams. Sustainability and inclusion are the new “growth strategy.” There is increased recognition by corporations that they must play a leadership role to ensure society’s fabric is intact.

Corporate partnerships with social enterprises — which have solutions to environmental and social problems baked into their DNA — are a potent lever for corporations to not only meet consumer demand and embrace the emerging opportunities, but also meet strategic, sustainability and impact goals. Indeed, the bond between corporates and social enterprises can be synergistic. Social enterprises are best positioned to help companies play a leadership role in this new landscape and advance the United Nations Sustainable Development Goals (SDGs). Corporations are often in the best position to help social enterprises scale, both their business and societal impact.

Social enterprise accelerators like Miller Center have an important role in this new paradigm and can support a number of value propositions for both social enterprises and companies who want to partner.

Build More Sustainable and Diverse Supply Chains

On the social enterprise side, Miller Center can grease the skids for social enterprises to partner with corporations by bolstering their business and impact models, so they can attract appropriate capital, speed their time to scale, and meet corporate supply chain requirements. The World Economic Forum, through its COVID Response Alliance for Social Entrepreneurs, has provided the opportunity for leaders in this space like IKEA SE, Yunus SB, EY, SAP, Acumen, Agora Partners, and others to build a framework to connect corporations to social enterprises interested in integrating sustainability into their supply chains and procurement spends. The framework will support social enterprises in meeting those unique corporate demands, as well as address corporate challenges when working with social entrepreneurs. As a social enterprise accelerator, Miller Center is building a ready pipeline of scalable social enterprises advancing the SDGs and can provide high-touch mentorship to help those enterprises become “corporate-ready.”

Gain Access to Market Intelligence and Emerging Innovation

For corporate partners, Miller Center can be a conduit to access existing scalable social enterprises — or for greater impact — it can co-create programs with companies interested in curated, customized pipelines of social enterprises solving social or environmental problems in communities where they operate that align with strategic sustainability or social justice goals.

For example, these pipelines put companies in touch with market intelligence on emerging innovations to get in on the ground floor of new markets, like technology-enabled food solutions in Africa, which can inform a corporation’s or corporate foundation’s future direct investments or next product line. 2020 brought a wave of corporates engaging as impact investors in social enterprises, investing in mission-driven startups aligned with corporate strategic priorities, aptly described by Macpherson, Emeott, Gustavsen and Choi. Most of the pioneers in this space — Amazon, Autodesk, Microsoft, Salesforce, TELUS, Citi and Unilever — are using their balance sheets for venture investments to de-risk markets for cutting edge solutions, like Amazon’s Series B financing of Rivian electric trucking and delivery or Autodesk’s investment in Factory OS, a prefab housing affordability company which uses innovative software platforms to streamline construction.

Avenues to Community Economic Development, Investment Readiness, and Employee Engagement

A pipeline of accelerated social enterprises can provide high-impact, innovative solutions to poverty that, for example, spur economic inclusion or provide access to energy, water, or climate-smart agriculture. Investments in the acceleration of local social enterprises demonstrates a corporate commitment to improving livelihoods in communities where companies invest — providing license to operate as well as demonstrating shared interests with key stakeholders, both national and local. (See Miller Center’s recent partnership with Chevron to scale enterprises providing climate-smart solutions that scale and help transition Asia Pacific economies to reliable, affordable energy and a low-carbon future.)

Corporations can work with Miller Center to co-create a program to scale a portfolio of enterprises that empower women leaders, reach marginalized communities, or advance SDGs relevant to a company’s core business. Research demonstrates that inclusion improves performance at both the individual portfolio company level and for overall fund returns. Companies such as Apple, PepsiCo, Starbucks, Netflix, Twitter, and Square, among others have established funds to invest in social or environmental justice. Miller Center can partner with these corporations to prepare pipelines of community-led social enterprises for fund investment. And all of these examples provide opportunities for companies to engage their employees in rewarding social impact work as mentors to social entrepreneurs, which develops leadership skills. These opportunities can tie directly to a company’s core business, providing valuable learning about emerging business models and market trends.

There will be a day when all corporations have a social purpose, and what Larry Fink and other visionaries have observed will be par for the course. But until that day, partnerships between corporations and social enterprises — albeit perhaps requiring the long view — is the ticket to solve for sustainability, impact, and inclusion in real time. It’s a concrete step we can take today that gets us closer to surmounting the monumental environmental and social challenges we face.

To learn more about how social enterprises can help you meet your strategic and sustainability goals, contact Jeri Jensen, Director of Partnerships for Social Justice, jjensen@scu.edu


Scaling Social Justice Through Partnerships 

How can institutions leverage social entrepreneurship to increase their social impact? A great story on the horizon is that corporations, foundations, international development institutions, non-profits, and even government agencies are doing just that, in ways that give agency to the poor and underserved, while spurring inclusive economic growth in communities.

Accelerating social entrepreneurship — growing enterprises in emerging sectors like IT, agribusiness, and energy access to become “investment ready,” so they can attract capital and scale solutions that improve lives — is already understood to be a pathway out of poverty for the traditionally overlooked.

Less celebrated, but equally impactful, is how social entrepreneurship can be a potent capacity-building tool for institutions interested in creating new businesses (and markets) in marginalized communities. Miller Center has engaged corporations, foundations, international development organizations, and nonprofits as well as governments — all of which are undertaking bold experiments to see how accelerating entrepreneurship can build what is needed to short-circuit the systemic barriers that have left so many behind.

In the case of corporations, one recent partnership highlights this promise.

Miller Center is working with Chevron Corporation, in collaboration with Smart Power Myanmar, a business unit of Pact, the global development agency, to accelerate the growth of mini-grid electricity enterprises and more advanced enterprises that can scale through access to power in Myanmar. This one-year pilot will accelerate a cohort of up to 20 selected enterprises in a variety of locations across the country, beginning with mini-grid developers. The project will address significant gaps in their business models, while building long-term acceleration capacity throughout the economy via a model that pairs Silicon Valley mentors with local mentors, who are trained by accompanying the enterprises in parallel. The model provides the enterprises with best global and local practices, as it builds local acceleration capacity to create persistent change.

By going beyond short-term solutions and contributing to the livelihoods in communities where Chevron operates, the partnership will enable the corporation to play a leadership role implementing innovative solutions to poverty in rural, under-developed regions through the deployment of mini-grid energy. Ideally, the pilot would ultimately be a bridge to use social entrepreneurship as a pipeline for investment in renewables in regions of interest to Chevron, and its methodology and design could be scaled to other communities where Chevron wants to have a positive impact.  Chevron has a 13-year partnering history with Pact in Myanmar, further augmenting their long-term approach to community support.

These partnerships are well aligned with the clear trajectory in corporate America to move away from the traditional view that the only responsibility of corporations is to shareholders, as Milton Friedman and others described in 1970. Increasingly, it Is becoming more about the “stakeholder economy,” where underestimated talent and technological scale build thriving businesses that serve local needs, create jobs, and restore neighborhoods. Indeed, in the ground-breaking August 2019 Business Roundtable statement signed by more than 180 US CEOs, “meeting the needs of shareholders” was near the bottom of a long list of corporate to-do’s, which first listed “fostering diversity and inclusion, supporting the communities in which corporations work, and protecting the environment.” Four in 10 Fortune 500 CEOs agreed last year that solving social problems should be part of their core business strategy, tied directly to the company’s profits.

Place-based investing, institutional sustainable investing and the rise of women-led enterprises in growth markets worldwide are all signs we are nearing a tipping point. Traditional paradigms are giving way to new approaches that address inequality through enterprise development and business growth. While many CEOs and investors may still reluctantly embrace this opportunity — and new frameworks are sorely needed that reward social impact outcomes — the bottom line is that corporations and institutions across the board are beginning to see their purpose in society more expansively. It is in this context where the capacity to grow social enterprises can be seen as a new tool.

Like corporations, foundations are pursuing innovative approaches to sustainably integrate social justice into their programs. Inspired by Pope Francis’ vision of a new capitalism as a force for good and the Vatican’s interest in leveraging impact investing to scale the social impact of the Catholic Church, Miller Center has a path-breaking experiment underway with the Hilton Foundation — working with a network of Catholic Sisters in East and Central Africa who are interested in moving away from a charity-based model to incorporate entrepreneurial principles into their ministries’ work. Catholic Sisters are uniquely positioned to unleash the power of women and youth in local African communities. However, their impact is constrained by charitable ministry models and limited capacity to move toward financially sustainable models. The Sisters’ Blended Value Project will use on-the-ground mentored learning with successful Miller Center social entrepreneurs to transform social ministries into social enterprises, starting with a subset of congregations of about 30,000 Sisters in ten countries. Again, the business acumen the Sisters learn and the capacity they build on this journey to ultimately build social enterprises on their own will not only change the way Sisters think and work, but enable them to “scale social justice” in communities — building upon the trust they have engendered over decades at the forefront of social justice for underserved populations, particularly women. As Sister Juunza Mwangani, an implementer of the pilot project described, it will provide an opportunity for African Sisters “to increase their impact in their communities by learning skills that empower, rather than give.”

Governments struggling with burgeoning youth unemployment are also looking to social entrepreneurship acceleration to address critical skills gaps that constrain their ability to grow new jobs and businesses. In Ethiopia, a new reformist government led by Mr. Abiy has made job creation and business development its highest priority. With 80 percent of job growth coming from startups, and youth constituting more than three-quarters of the population, skill and enterprise development will be fundamental to the government’s success and survival. A recently-signed MOU between Ethiopia’s Ministry of Science and Higher Education and Miller Center will bring Miller Center’s scalable methodology and curriculum to four Ethiopian universities to accelerate high-impact sectors like education, technology, financial services, and agribusiness — a stepping stone in their goal of creating up to 4 million jobs a year for the next ten years. A robust pipeline of social entrepreneurs will not only provide much-needed high-tech skills and jobs, but also help Ethiopia attract some of the $1 billion in capital for enterprise investment that’s now headed almost exclusively toward Kenya, Tanzania, and South Africa. Once the partnership is underway, it could be scaled throughout the Ethiopian university system and become a prototype for other African countries, where youth unemployment is the biggest risk to broad-based economic growth. We are looking to corporate foundations with strong interests in a healthy Ethiopian economy to partner in this effort.

In the case of nonprofits, Miller Center is partnering with Innovation Works to support its capacity to launch and scale new businesses and build sustainable neighborhoods in Baltimore. A unique 5-stage methodology co-created by the two organizations, combines global and local best practices adapted for urban contexts. To scale this model throughout the US, we are looking for corporate, foundation, academic, and state and local partners interested in solutions to inequality in communities where they serve.

Finally, a US government foreign assistance agency, which shares the goal of inclusive economic development and is in the market for innovative approaches that reach smaller investees –  has discovered the tool of acceleration capacity for social enterprises. The Aspen Network of Development Entrepreneurs (ANDE) recently noted that while DFIs do indeed invest billions in enterprise development, they do it indirectly, primarily via enterprise funds, other financial institutions, and as a means to achieve outcomes in other sectors, such as agriculture, energy and health.  Miller Center has a cutting edge, one-year learning partnership in Kosovo and Tunisia with the Millennium Challenge Corporation to test a cohort model’s effectiveness in achieving women’s economic empowerment in Kosovo, as well as assess systemic approaches that can strengthen women’s entrepreneurship acceleration capacity in Tunisia.  We hope that by demonstrating the power of entrepreneurship in empowering underserved populations and spurring entrepreneurship growth more broadly, the pilot can help prove the value of investing in scalable partnerships that generate accelerated growth of female businesses for growth and poverty reduction. as an end of itself.

Institutions now have the opportunity through partnerships like these to mainstream the capacity to grow new skills, jobs, and businesses, and yes, scale social justice, in communities they care about most. These pilots are lighting the path for new ways to lift the underserved out of poverty and provide long-term, systemic solutions at an enterprise, community and national level. Whether for-profit, non-profit, hybrid, state, or local, institutions are developing partnerships that can, directly or indirectly, address systemic inequality. We hope that as social impact strategies are developed for 2020 and beyond, these examples become the rule.