Building public benefit and shared value into business


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Building public benefit and shared value into business was a presentation delivered at the Schulich School of Business Greenedge Conference 2011. The presentation covers the motivation for public benefit

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  • East African drought of 2009: five year drought affecting Kenya, Ethiopia, Somalia, Uganda, Sudan, Djibouti and Tanzania. Estimated that 23 million struck by a crisis with a shortfall of water, food and livestock. Livestock deaths on a massive scale; tens of thousands. A can of water increased in cost by four times in a single year. Assets held in cattle
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  • Transition to “shared value”; leadershipHe is a leading authority on company strategy and the competitiveness of nations and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally. He chairs Harvard Business School's program dedicated for newly appointed CEOs of very large corporations.Founder of the Monitor Institute
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  • Hitachi social innovation strategy
  • Building public benefit and shared value into business

    1. 1. Net Impact: GreenEdge 2011 Conference<br />York University, Schulich School of Business<br />Building public benefitand shared value into business:Models in Canada and around the world<br />
    2. 2. Summary<br />Motivation<br />Case Studies<br /><ul><li>Affordable Housing Models
    3. 3. Local Models
    4. 4. Global Models</li></ul>Looking Ahead<br />
    5. 5. Motivation<br />
    6. 6. We are faced with seemingly intractable social and environmental problems at a global and local level.<br />
    7. 7. Our Challenges:<br />1. Poverty<br />2. Climate change<br />3. Government debt<br />4. Economic transition<br />
    8. 8. Sandy Lake First Nation 2008<br />
    9. 9. Kenya 2009<br />
    10. 10. Ottawa 2009<br />
    11. 11. Windsor 2010<br />
    12. 12. The Cost:<br />Billions & trillions <br />of dollars.<br />Hundreds of thousands <br />of lives.<br />
    13. 13. We have a fundamental responsibility to act. We need to change the way we live and the way we do business.<br />
    14. 14. An agenda driven by:<br />Consumers<br />Thought Leaders<br />Political Leaders<br />Investors<br />Ventures<br />
    15. 15. Professor Michael Porter<br />Bishop William Lawrence <br />University Professor <br />at Harvard Business School<br />
    16. 16. “<br />In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community...The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges…The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy.<br />
    17. 17. The concept of shared value recognizes that societal needs, not just conventional economic needs, define markets. It also recognizes that social harms or weaknesses frequently create internal costs for firms—such as wasted energy or raw materials, costly accidents, and the need for remedial training to compensate for inadequacies in education. And addressing societal harms and constraints does not necessarily raise costs for firms, because they can innovate through using new technologies, operating methods, and management approaches—and as a result, increase their productivity and expand their markets.<br />”<br />
    18. 18.
    19. 19.
    20. 20. Market Potential<br />Local: $30B<br />HNWIs: $120B<br />Global: $400B - $1T<br />
    21. 21.
    22. 22. Case Studies<br />
    23. 23. Case Studies in Affordable Housing<br />New York City Acquisition Fund<br />Goal: support the development of 30,000 low income housing units in New York City to address housing shortage<br />Target: for-profit and non-profit affordable housing developers to refurbish or build units<br />Fund size: ~$200 million<br />
    24. 24. Serviam Gardens: $3.6 million loan an 83-unit complex for low-income seniors in the Bronx via NYC Acquisition Fund.<br />
    25. 25. Regent Park Revitalization: <br />Public benefit financing and enterprise focus <br />
    26. 26. Social Hiring:<br />SCP & Active Green & Ross<br />
    27. 27. Partnership Model: Local<br />Social Venture Exchange (SVX)<br />A local, impact-first market connecting social ventures, impact funds, and impact investors in order to catalyze new investment capital geared towards improved social and environmental outcomes.<br />Public benefit partnership led by Social Innovation Generation (SiG) at MaRS and the TMX Group Inc. with the support of the Government of Ontario<br />Focus on debt and equity offerings for non-profit and for-profit ventures reducing poverty, increasing opportunity and enhancing sustainability (affordable housing providers to solar power firms)<br />private online market platform with venture listings, fund listings, a resource centre, investor collaboration tools, and a service provider listing modeled on private markets in the US and other evolving impact market platforms<br />
    28. 28. Social Purpose Business:<br />Turnaround Couriers<br />
    29. 29. Global Innovation Model<br />
    30. 30. Partnership Model: Global<br />Mission: to bring health through food to the largest number of people in Bangladesh<br />INVESTMENT REINVESTMENT<br />RETURN/REFUND LOCAL DEVELOP.<br />Value: Combating malnutrition through the sale of a low cost yogurt cup.<br />
    31. 31. Base of the Pyramid(BoP) Model<br />Finestrella:Regional mobile phone company focused on low-income customers.<br />
    32. 32. Challenges<br />Skeptics<br />Getting the business model right: hiring and training, authenticity, fit<br />Entire mission vs. focused brand<br />Balance: Investor demands, profitability and patient capital<br />Philosophical: basic service delivery by government or private sector<br />Impact measurement<br />
    33. 33. Looking Ahead<br />
    34. 34. Significant growth <br />Legislation<br />Sector agnostic start-ups<br />Corporate social innovation<br />
    35. 35. Net Impact: GreenEdge 2011 Conference<br />York University, Schulich School of Business<br />Thank You<br />