Economy: The era of social impact | 3,500 million | Future Planet

Many of us have wondered what is the real impact we generate when we donate to an NGO, consume sustainable products or invest. It is not an easy answer, but there are more and more analyzes that bring us very close to this reality. For example, a measurement project has quantified the changes that the Corporate Volunteering programs of various companies have generated. And now we can already know that, for every euro invested in this initiative, for example, Endesa generated 10.30 euros of social value for society.

The global economy has made immeasurable gains for humanity, but it has also generated negative externalities, unintended consequences, and systemic risks that are undermining future prospects, security, and well-being. Global warming and inequality are just two of the indicators that corroborate the prevailing need for a transformation of the model in which there is no turning back.

Around this idea of ​​a change of approach, alternative proposals have been made, including the economy of social impact. This new way of understanding the economy makes it possible to put environmental and social variables on the same level, counteracting economic supremacy. Its uniqueness lies in the fact that it hopes that its participants can, simultaneously, satisfy their wishes and have a positive impact on society and the planet. In the future, all companies would become social companies.

The social impact will only be a passing fad if it is not possible to understand the changes it has generated

That said, the social impact will only be a passing fad if the changes it has generated cannot be understood. This measurement will promote positive impacts and prevent or mitigate negative ones. In turn, the measurement may remain in an empty term if the results obtained are not used to manage. That means incorporating the learnings from measurement into the organization’s decision making.

Therefore, it is essential that the growth of this new ecosystem is intrinsically linked to data and management. Without it, we would not be able to know, for example, that Triodos Bank, a European benchmark in ethical and sustainable banking, has been moving towards change management, improving the impact of its intervention thanks to the external social audit it undergoes.

Impact investing, made up of a large number of actors including private equity, ethical and social banking, has taken the lead in recent years, strengthening the sector with a growth of 26% between 2019 and 2020. The speed with which it has evolved and when this ecosystem has grown it is promising, even so, only its foundations have been laid and there is much to be built.

More organizations need to continually become part of this industry. This will occur when the norms (practices, policies, principles and standards) are widely accepted, consistent and stable, as is the case with those that govern the financial system. Entering or moving in a market where there is certainty and transparency will stimulate large and small providers of capital by allocating more resources to finance social initiatives, at the same time that applicants will design business models aligned with that offer.

In this spirit, 50 organizations (including social companies, traditional companies, investors, NGOs, Administration, accelerators, among others) have come together to agree on a common language and lay the foundations of the ecosystem. All this process of reflection of months has been collected in the first report of the think tank of Social Impact of the Chair of Social Impact of the Universidad Pontificia Comillas. This amalgam is unique in the Spanish ecosystem, which makes it especially rich and necessary in an embryonic phase where it is necessary to build together to establish solid foundations.

The report aims to be a guide for all the organizations that make up the group, but it also wants to be a manual for all those who want to start in the world of impact. We believe that the work, reflection and agreements reached and reflected in this document can be an important stimulus to grow the ecosystem and, furthermore, to do so with a shared and widely extended narrative.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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