License to innovate
Breakthrough strategies
for social impact

February 2016

Contents

Foreword

3

Introduction

4

The business case for social impact

7

A view on demand7

A view on supply

8

Barriers to innovating for social impact

10

Five social innovation strategies

11		 Invest in external solutions

15

		 Engage a network

17

		 Accelerate externally19

		 Sandbox solutions

21

		 Innovate in house

23

Recognizing a company’s readiness for social innovation

25

Choosing the “best fit” strategy

27

Conclusion

28

Acknowledgements

30

Foreword
Many of the shifts in “business as usual” to addresssocial challenges that we see today have been years in
the making. Back in 2010, 29 leading global companies
spanning 14 industries recognised that the way goods areproduced and consumed could benefit from a fundamental
rethink. Businesses seemed to be falling far short of thepositive impact they could achieve through market-based
solutions in areas ranging from education to healthcare
to mobility. These aspirations were captured in the World
Business Council for Sustainable Development’s (WBCSD)
Vision 2050, which decisively viewed society’s pressing
challenges as tremendous opportunities for businesses toinnovate more impactful solutions.
This vision and drive could not be more relevant today,
as demonstrated by this past autumn’s launch of the
Sustainable Development Goals (SDGs), which explicitly
call on business to creatively and collaboratively address
sustainability challenges such as poverty, gender equality,
HIV/AIDS, and climate change.
Forward-looking companies are already finding ways
to address the biggest issues facing society throughbusiness-led ventures that are impactful, scalable,measurable, replicable, and that go beyond traditional
business as usual. As this report investigates, companies
face an expanding set of reasons why pursuing social
impact is in their best interests. Both the scale of demand
and the preferences of stakeholders – who extend far
beyond shareholders and consumers – are applying
unprecedented pressure on companies to deliver offerings
that, in addition to their intrinsic utility, provide value tosociety. This can be seen in a range of contexts, fromthe discerning millennial customer who takes to social
media to rave or rant about a company’s practices, to therising global middle class that seeks education and healthservices that improve wellbeing and future prospects intheir communities. It is now the rarity for a multinational
corporation to be unaware and unresponsive to thesestakeholder expectations, pervasive as they are.

Peter Bakker
President and CEO, World Business Council
for Sustainable Development

Trends on the “supply” side are also reinforcing this shift.
Some are clear opportunities: businesses are able to reachmore customers and be responsive to their needs at alower cost through technology. New legal and financial
structures ease the perceived tension between financial
and social impact. Others threaten the status quo: “bornsocial” companies whose entire brands are built aroundtheir positive impacts on society challenge industry
norms, leaving established companies struggling to keep
up. Resource scarcity and climate change are pushingcompanies towards greater efficiency, which has provoked
particularly intense discussion surrounding the COP21.
If one thing is clear, it is that business as usual is notsustainable and that social innovation offers one
compelling alternative.
The WBCSD and its members, Deloitte among them,recognise that collaborative problem solving will be a
critical part of how companies redefine the value they
provide to society and innovate to solve global challenges.
Developed well, these new business solutions may
enable companies to better manage their risks, anticipate
consumers’ demand, build positions in growth markets,secure access to needed resources, and strengthen their
supply chains.
Through this paper, the WBCSD and Deloitte seek toillustrate not only why but primarily how companies
can develop and integrate business solutions with social
impact into their core business. By understanding both thesuccesses and failures of early movers, the report looks
to help companies understand if they are ready for social
innovation and, if they are, which strategies may best suit
their company’s potential offering. This is done with thehope to encourage more companies to actively pursue
social innovation as a means to achieve greater long term
sustainability, financial growth, and social impact.

David Cruikshank
Global Chairman,
Deloitte Touche Tohmatsu Limited
License to innovate Breakthrough strategies for social impact 3

Introduction
Can a company of scientists actually change the world?
Can it be commercially compelling enough to transform“business as usual,” propelling business towards a vision for
the future that is larger than its own? If the first challenge
was not ambitious enough, the latter certainly adds
complexity. Yet Novozymes leadership saw–and seized–
the potential to deploy their industrial biotechnology
capabilities towards this bold aspiration.1
Determining what such an undertaking would entail
would prove to be a task in itself. Innovation “insiders”
within the research and development (R&D) division andintrapreneurial employees from other parts of the company
excitedly explored possible projects, only to find themselvesin a Goldilocks scenario; projects were one by one crossed
off for requiring too long a time horizon, too significant an
investment, not yielding enough impact or returns.
Finally, in 2008 an employee brought an idea to
Novozymes leadership that felt promising, even if otherbusiness units were not convinced. The concept involved
providing a clean cooking solution to replace charcoal use
in the fast-growing capital city of Maputo, Mozambique,by locally producing ethanol from sustainably growncassava. The Novozymes CEO approved the project,which would report directly to his office, to see how thecompletely new business model would develop.
Over the following months the idea evolved into a businessplan, which turned into a partnership between local andglobal organizations and ultimately a fully funded company
in Mozambique that encompassed an entirely new value
chain. The new business equipped urban householdswith a cheaper alternative to fossil fuel energy, reduced
charcoal-based deforestation, and offered increased
incomes and more productive lands in the region.2

example of double-digit annual GDP growth and an
entry point into a burgeoning middle class market only
strengthened the business case.3 The business developed,with thousands of engaged suppliers and customers andmillions of dollars raised. It didn’t take long for word to
spread. Awards were won, receptions attended, interviews
held.
Just when the new venture seemed on the cusp of muchgreater success in 2012, it began to falter. What started
as observed challenges within the value chain turned intolarge cost-overruns. Local conflict between the governmentand rebels caused supply disruptions and reduced sales.
The local management team struggled to keep ahead of
the challenges. Eventually, after several rounds of rescue
attempts, the investment needs exceeded shareholder
appetites–and the venture was wound down in 2014.4
In hindsight, Novozymes recognizes that despite its best
efforts and will to achieve social progress the company did
not have the necessary local context and capabilities toproperly incubate the venture. Governance was too weak
and slow, partnerships were inadequately designed to deal
with conflict, and it was unwise to let the project remain
separate from any core business unit that might have had
the interest and strength to protect it in times of trouble.
Projects that strive for more modest goals than reinventing
an entire value chain–and plenty of the companies
pursuing equally ambitious objectives–struggle with thesesame challenges. Such projects, as we will explore morein this report, take time, distinct skill sets, and geographic
reach, which all require companies to stretch beyond theirprevious ways of operating and quantifying impact.

For many at Novozymes, witnessing the positive
societal outcomes of the Mozambique business offeredan exhilarating taste of a different kind of business
opportunity. The fact that the country was also a rare

License to innovate Breakthrough strategies for social impact

4

Only three percent of Fortune
500 companies register as true“social innovators,” while fully
one-third of Fast Company’s
most innovative companies
qualify.

while fully one-third of Fast Company’s “Most Innovative
Companies” qualify. By this measure, most establishedmultinationals have much to learn from the emerging“born social” companies that are valued fortheir ability to put a social purpose on par with theirfinancial targets.5 If becoming a “social innovator” is theaspiration of a widening set of multinationals, the majority
may still be described as either “corporate contributors”
who are reacting to external pressures for improved
transparency and socially responsibility or “impact
integrators” that more proactively embed social impact
into their offerings. Read more about these “archetypes” inthe box below. Those companies looking to move towards
achieving greater social impact through their core business
are the prime audience for this report.
Corporate
contributors
53%

Number ofcompanies

These requirements are not deterring companies frompursuing social impact efforts. Quite the contrary,companies increasingly view these solutions as an integral
part of the business. Consider a couple of the stories thatemerged from our research, which will be explored further
in this report; the oil and gas giant that gradually becamea life sciences-centered company and no longer makes
investments that fail to satisfy its “people-planet-profit”
test. Or the snack food company that increased their R&D
in the basic sciences tenfold to create healthier ingredientsthat don’t sacrifice flavor. But this scale of transformation
still represents the minority of large multinationals.

Shareholder
maximizers
11%

Impactintegrators
33%

Socialinnovators
3%

This is consistent with an analysis performed by Deloitte’s
Social Impact practice of Fortune 500 companies, where
only three percent registered as true “social innovators,”
Profit firstSocial first

The four corporate archetypes
In 2015 Deloitte analyzed how Fortune 500 companies—which span six industries, 53 sub-industries, and over 40
countries—prioritize social impact by examining their public information across 60 metrics. Scores across those metrics
were simplified into four “archetypes” based on the extent to which they integrate social impact into their core business.
Those archetypes are defined below, as well as the distribution of companies across the 4 archetypes.
• Shareholder maximizer: The primary motivation of the shareholder maximizer is short-term shareholder value. Their
strategy emphasizes risk mitigation.
• Corporate contributor: Social impact for the corporate contributor is driven by external factors, including key
stakeholder relationships. Their strategy is siloed within the firm.
• Impact integrator: For an impact integrator, social impact is integrated within firm strategy and across business units.
• Social innovator: Social impact is an integral piece of the overall strategy for a social innovator. Their business createssocially-conscious goods/services and markets.
Given the strong interest of corporate contributors and impact integrators to innovate new offerings that yield social
impact, taking cues from top social innovators, the five strategies introduced in this report can help companies advanceon this path.
John Mennel and Nate Wong, “Driving corporate growth through social impact,” Deloitte, 2015,www2.deloitte.com/us/corporate-archetypes.html

License to innovate Breakthrough strategies for social impact 5

Our interviews with ~20 companies and secondary
research have surfaced many companies that are
mid-process and have already navigated–and often
overcome–significant hurdles along the path to achieving
impact and growth.
We will share the rationale of this vanguard, beginningwith the trends that many large companies are viewing
as grounds to embed social criteria into significant
decisions about where to operate and what to sell. It
is worth noting that this paper centers on achieving
growth alongside social impact, where social impact
represents measurable improvements on issues that affectsociety, from education to well-being to more equal
access to opportunity, particularly where it concerns
previously unserved or underserved populations. In somecases companies may make environmental impact anadditional criteria guiding their strategic decisions. This
report includes some examples where both social andenvironmental impact are pursued, but the focus of thisreport is to identify and explore strategies that specificallytarget social impact.
Once it is clear “why” some companies are pursuing social
impact as a growth opportunity, we can focus the bulkof this report on the much harder question of “how”
companies might do this. We have identified five different
strategies that span varying levels of company ownershipof the innovation process, from fully advancing social
innovation in-house to engaging external contributors
for large parts of the process. A company may choose topursue a hybrid of these strategies. To inform a company’s
choice of which to pursue, we will offer examples andsuggestions of ways to effectively deploy each strategy andwhat to avoid. As a company prepares to embark on its
selected path, we offer conditions within a company, its
industry, and the broader environment that appear to set
companies up for success when pursuing social impact.
Open-mindedness that enables a company to be resilientin the face of missteps is a critical condition, as occasional
failure is an inevitable consequence of pioneering in new
territory. Giving up on the venture in Mozambique could
have precipitated a pivot for Novozymes away from its boldvision to pursue high-impact business ventures. Instead it
prompted consideration of the systemic challenges thatwere faced–both internally and externally–and a discussion
about what it might take to address these challenges for
Novozymes and other corporations with similar ambitions.
Novozymes has since chosen to partner with the WBCSD
to develop an incubator that addresses many of thechallenges faced by large corporations desiring to pursue
high-impact ventures. The incubator is called DIVA
(Development through Impact Venture Acceleration) andoffers a chance to help others navigate the stumbling
blocks that Novozymes encountered with the Mozambique
business. This is in line with its corporate strategy of“partnering for impact,” where Novozymes explicitly aims
to help achieve the SDGs.6 This spirit of resilience andcollaboration is critical to truly redefine the role and impactof a business’s offerings in society.

Distinguishing between “social innovation” and “social impact”“Social impact” and “social innovation” are sometimes referred to as interchangeable concepts, which ignoresa subtle but important distinction between a process and its outcomes. A company ostensibly embarks on an
innovation process to develop breakthrough business solutions; in the case of social innovation the “breakthrough”
has the dual dimensions of social impact and financial viability, often with an eye for measuring the impact achieved
through the solution.

License to innovate Breakthrough strategies for social impact

6

The business case forsocial impact
Successful businesses would not prioritize social impact on
the scale it is currently being pursued if they did not see
a compelling business case, encouraging them to stretch
beyond their traditional customers and offerings. After all,social innovation is not without its risks and challenges.
There is the potential risk to the brand, the outlay offinancial resources with great uncertainty of returns,
the time that could be spent pursuing more immediate
opportunities closer to the company’s comfort zone, theeffort involved in evaluating whether a solution actually
improves social outcomes.
However, market transformations in recent years have
exposed the cost of inaction in a fast-changing world:
irrelevance, lost market share, and perhaps evenobsolescence. Reminders of Joseph Schumpeter’s creative
destruction abound, in some cases wreaking havoc on
entire industries. Recent years have seen upheaval in themusic industry with the arrival of streaming services andin the print journalism world with the proliferation of
profuse free and cheap digital content. Whereas making
it into the Fortune 500 fifty years ago meant you had 75
years, on average, to maintain a leading position, nowthat average is less than 15 years.7 Companies today, morethan ever, recognize the importance of taking notice of
today’s peripheral actors and trends as they may bringsignificant changes to the company’s own business. For
many of the reasons we are about to acknowledge, social
impact is one such topic that has moved from a niche toa more mainstream discussion. Multinational companies
that disregard the widespread support for global objectives
such as those coming out of the COP21 meetings on
climate change and the Sustainable Development Goals,
not to mention the social issues that directly relate to theirbusiness, do so at their own peril.

A view on demand
It may seem ironic that competitiveness is now a driving force pushing companies to pursue social impact. A powerfulcontributor to this trend is the influence that buyers, or those on the “demand” side of the global economy, exert throughboth their scale and preferences.
The sheer volume of demand globally is unprecedented, driven in large part by the doubling of the middle classin emerging markets. Whereas developed economies are most recently characterized by stagnating living standards anda hollowing middle class, for the first time in history a truly global middle class is emerging. With rapid growth in China,
India, and parts of Southeast Asia, the global middle class is expected to more than double in size by 2030, from 2 billion
today to 4.9 billion.8 The International Finance Corporation values the purchasing power of the 4.5 billion people at thebase of the pyramid (BOP) today–those with significantly less purchasing power than the middle class–at US $5 trillion.
Many of the products and services they are seeking en masse, such as schooling and access to health clinics, advancesocial outcomes.9
Additionally, the majority of both consumers and talent favor transparency and socially responsible businesspractices and that contingent is only growing. Today, 81% of consumers read some sort of customer review or rating
prior to making a purchase.10 Consumers’ expectations of “socially responsible practices” are also expanding to include
aspects of the business that may not have previously been included, from the diversity of a company’s workforce to theperceived health of ingredients to how consumer data is used. A company’s ability to perfectly capture the smell or tasteof strawberry in an artificial flavoring is of little interest to consumers seeking unprocessed food and natural ingredients,
hurting sales of processed foods and fast food chains in some regions. A recent survey indicated that millennials inparticular are driving this shift, with 42% of millennials surveyed expressing distrust of large food companies compared to18 percent of non-millennial customers.11 Millennials also tend to gravitate to businesses that have a purpose to “improvesociety” over those that simply “generate profit.”12 Looking globally, even the poorest populations are typically able tobe resourceful and discerning in where they spend their precious resources with their mobile phones and the ability tocompare prices and options.

License to innovate Breakthrough strategies for social impact 7

Shareholders are increasingly looking to invest in companies that share their values. From promoting sustainability
and measures against climate change to fighting predatory lending practices and supporting human and laborrights, shareholders are using their power to encourage responsible business. Money managers increasingly integrate
environmental, social, and governance (ESG) criteria into their portfolio investment decisions, with the assets invested inthis way expanding fourfold between 2012 and 2014 in the US.13 2015 was on track to set a record for the number ofshareholder resolutions filed on social and environmental issues.14 Achieving the majority of shareholder votes on theseresolutions, while rare, nevertheless puts public pressure on the company to change policies and is often pursued inparallel with a consumer and/or media campaign to raise awareness about the complaint.
Consumers and shareholders are just two of an expanding set of stakeholders to which companies must be
responsive. Indra Nooyi, chairman and CEO of PepsiCo, states that “being a CEO is no longer [just] dealing with youremployees, your customers, suppliers, your investors. This is dealing with governments, NGOs, with any interested party
who decides to challenge your company.”15 In recent years the scrutiny has been acute, a symptom of the fact that only
57% of consumers report that they trust the business sector.16 Those harboring distrust are known for being vocal andcreativity is the limit for expressing strong opinions online that may go viral, whether by a backlash on Twitter or an artistic(but no less scathing) social commentary, such as distorting a company’s recognizable logo to make a statement, as has
occurred in the lead up to the 2022 World Cup.17

A view on supply
The growing demand that companies face to deliver social impact spans from opportunities (new consumers, newproducts) to threats (public outrage that tarnishes the brand and reduces sales), both of which encourage companies to
respond to this call, even if for opposite reasons. But market demand is only half the story; various trends on the “supply”
side are stimulating the development of business models that yield social impact.
Technology is enabling businesses to achieve impact for a larger population at a lower cost. Take Safaricom, which
saw opportunity in a country where financial inclusion was limited and transporting cash was typically both risky andslow. Within a decade M-Pesa, the company’s platform for money transfers and micro-financing services, has becomenearly ubiquitous in the daily lives of Kenyans, extending financial inclusion to nearly 20 million Kenyans and facilitating
the creation of thousands of small businesses.18 Technology is shortening the distance to reach customers, expanding thecapabilities that companies can offer them, and allowing for greater agility to respond to shifting customer needs.
When access is valued over ownership in the “sharing economy,” services tend to drive growth more than
products. Technology has made it easy to share cars, accommodations, knowledge, even the equipment individuals
need to create their own custom solutions in “maker spaces” like Fab Labs, numbering over 300 globally.19 Millennials
are earning a reputation for leading the charge, generally expressing less interest in ownership across a range of productcategories. New sources of competition are forcing local taxi companies and multinational hotel chains alike to reevaluate
their business models, while at the same time offering new flexible work arrangements and revenue sources for individuals
who can act as service providers. The employment prospects and expanded access to mobility and other services are social
goods generated through these new businesses.
Diverse funding options with a social impact focus are providing resources to develop innovative businessmodels. Companies today have numerous options to invest for financial and social returns, including impact investing andblended funding structures that combine philanthropic and commercial capital. More companies are also bringing socialand environmental criteria to their corporate venturing, which represents 20% of all venture capital deals.20 The latest JP
Morgan/GIIN Impact Investor survey covered 146 leading impact investors who reportedly invested US $10.6 billion in
impact investments in 2014 and planned to invest an additional 16% in 2015.21

License to innovate Breakthrough strategies for social impact

8

“Born Social” new entrants are providing compelling alternatives to the offerings of large companies while
delivering measurable social impact. Companies like The Honest Company and Method are directly competing on
the same shelves as traditional consumer brands, while other startups are catering to changing consumer preferences
to shop online, offering subscription programs to healthysnacks and online ordering of buy-one-give-one productsthat directly provide social services and staples to low
income populations. Once these new entrants are able todemonstrate the individual impact and profitability of theirmodel, they tend to become attractive targets for investors
and for acquisition, such as Bain Capital taking a 50% stakein TOMS.

In some industries and parts of
the world social impact
offerings can differentiate acompany from competitors andNew legal structures make it easier for companies toguard against new entrants,
prioritize social impact than in the past, when companies
while for others it is now an
subscribed to shareholder wealth maximization andmeasured success by financial targets alone. Companies
industry-wide necessity thatcan now incorporate under the legal status of a low-profit
represents part of a company’s
limited liability company (L3C) or benefit corporation(B Corps), reducing their risk of lawsuit under accusations“license to operate.”that they are failing their fiduciary responsibilities by
pursuing social impact. To date “benefit corporation” legislation has passed in over 40 countries.22 Both older andbrand-new companies have registered as B Corps, including Patagonia, Warby Parker, and Kickstarter.

Climate change and the scarcity of natural resources is also pushing many companies to seek greater resource
efficiency in their practices and products, spurring development of new technologies in areas such as renewableenergy and green buildings as well as improvements in sourcing and supply chains to reduce waste. Ninety percent ofEuropeans want their governments to set higher targets for renewables in the energy mix by 2030.23 In India, renewableenergy was a prominent election topic in 2014, with many voters arguing for greater use of renewable energy to improve
electrification rates in the country.24 But the Chinese have taken their commitment to the next level and are looking tocapitalize: Chinese companies have “invested a record-level $89 billion in renewable energy projects in 2014, 31% higher
than 2013 investments”–becoming the world’s leading investor in the sector.25
Some of the supply-side shifts described here have made it easier for companies to prioritize social impact while others
have made it essential. Taken together with the shifts in demand, the combined effect is one that involves companies
developing a strong point of view on the type of social impact they are in the business of creating. In some industries
and parts of the world this offers an opportunity for a company to differentiate from competitors and guard against new
entrants, while for others it is now an industry-wide necessity that represents part of a company’s “license to operate.”
Even those in the latter camp are increasingly looking to move beyond simply meeting the standards and expectationsof the industries and geographies where they operate to a “license to grow” position, which allows the company “to be
invited into communities–not just tolerated” in the words of Dan Bena, senior director for Sustainable Development
at PepsiCo.

Our methodology
The findings of this report are informed by 20+ interviews with company representatives of multinational
corporations, international organizations, and social innovation experts. Their input regarding the internal conditions
and partnerships necessary for developing business solutions for social impact shaped much of the thinking of thisreport. The combined experience of WBCSD member companies who are already pursuing the five social innovation
strategies described in this report provides insight into what makes each strategy effective.

License to innovate Breakthrough strategies for social impact 9

Barriers to innovating forsocial impact
The supply- and demand-driven trends just described provide companies with ample reasons to pioneer ways to maketheir business more socially impactful, but even the most innovative companies often struggle to translate what works
well in other parts of the business into offerings that measurably link to and improve specific social outcomes. This tends
to be especially true when it involves reaching populations and needs they have not served before. Below are some of thecommon internal and external barriers that surfaced in our research.
Internal

External

Lack of legitimacy and support: Whether the company The complexity of addressing systemic social
culture is one that generally resists change or there arechallenges: Companies that are used to acting quickly
specific aspects of the “social impact” agenda that people
are resistant to, social impact efforts lack internal support.

The potential solutions are too immature/earlystage: Even if key decision makers can agree that thecompany is well positioned to make progress against
a specific high-priority issue and the societal problem
is well understood, they may not have confidence yetthat a business model will effectively deliver the desired
outcomes.

on their own may struggle to take a systemic view, as it
involves investing the time and effort to develop solutions
that draw on the collective intelligence of multiple sectors
and disciplines in order to address the root causes of asocial challenge. Without engaging key organizations andinstitutions, the absence of a “minimum viable ecosystem”
will preclude tackling systemic issues.

The difficulty of demonstrating attributable,measurable social impact: Many companies faceintense pressure from internal and external stakeholders
to quantify the impact their offerings are having against
the targeted social issue in a transparent way that clearly
resources that can be dedicated towards developing
links to the company’s own actions. Absent an evaluation“social impact” offerings may stall or prevent action. Even
regime that embraces the rigor of randomized control
when external financing options exist, the company may
trials, isolating the effects of an intervention amidst
be unfamiliar with them or find them unattractive (perhaps
numerous other variables can prove challenging.
due to the terms and/or time horizon). Further, theinvestments may have lower expected rates of return than Not enough—or the wrong kind—of financing:other opportunities because the cost or risk of the “social
Developing a new solution that requires external
impact” offering is high, anticipated margins are low, and/ investment hinges on finding terms of financing thator a long time horizon is needed to break even.
match the specific needs of social impact ventures at
each stage of their development, whether that entails
Strategic and operational misalignment: If thea longer time horizon to evaluate the social outcomescompany still views “social impact” as living solely in aof an offering or investment in capability building, notcorporate social responsibility or communications part ofjust financial resources. Securing funding from sources
the company, existing operating structures and processes
that understand these constraints and can supply such
likely cannot be leveraged to develop new offerings
support is competitive and may be resource-intensive toand those within the core business may not have strong
acquire, with elaborate up-front applications and ongoing
incentive to contribute.
evaluation requirements.

Limited resources and high opportunity cost ofinvestment: The lack of internal human and/or financial

These are barriers which, with the right strategic forethought, can be mitigated or altogether avoided. The strategies
introduced in the next section aim to help companies identify ways to advance social impact through a path that is theright fit for the skills, resources, and support that the company brings internally as well as the external pressures that thecompany is up against.

License to innovate Breakthrough strategies for social impact

10

Five social innovation strategies
The companies that participated in our research span
industries and geographic regions globally and yet thetrends just described were recurring themes in ourinterviews that help explain why companies today feelcompelled to consider social impact in the same breath
as profits when deciding which opportunities to pursue.
Common stimuli may compel all of these companies to act,but how they choose to respond is where they diverge.
Some companies are early into engaging business units incorporate social responsibility-led initiatives; others haveincluded social criteria when investing through corporate
venturing for years. In all cases the desire to cultivate astrong culture of tackling ambitious societal issues was
deeply aspirational; regardless of the current activity it
was insufficient and could be improved upon, whichreflects both the determined vision and candor of those
we spoke with. Even for those who conclude that they
have the foundational conditions in place to pursue social
innovation, there is the open question of how to executeon the vision in a way that is most impactful, financiallycompelling, and authentic to the company’s mission.
Fortunately, much can be learned from both the successes
and struggles of “social innovators” that are years intoexperimenting with how to achieve such progress,
including many that we engaged in this research.
Companies prone to a stance of “fast followership” maylook to these organizations and question the feasibilityof exactly replicating their choices rather than developing

their own efforts from scratch. Clearly learning from others
can infuse fresh thinking and helps companies sidestep
the stumbling blocks of those who went before them.
Pearson’s Amanda Gardiner, vice president of sustainability
and social innovation, speaks admirably of what has beenlearned by engaging with companies such as Barclays,
GSK, and Mars around developing the in-house capabilities
to design products and services for low-income andmarginalized populations. As Gardiner’s team works tolink offerings to learning outcomes, Pearson’s growing
experience in this area may likewise prove beneficial toother companies looking to measure impact. In these
instances collaborative learning supports a company’s own
innovation process, but in other cases a company may try
to bypass innovation completely by instead selling copycat
versions of items already on the market.26
The five strategies that emerged in our research reflect
the approaches of companies looking to develop theirown unique offerings, as opposed to merely reproducing
existing products. In large part this is motivated by a desire
to deliver true innovation that delivers measurable impact,
earning the company a reputation of a groundbreaking
problem solver while earning compelling returns. To
this end, the five strategies defined in figure 1 reflectapproaches that these companies are either actively
engaged in or are working towards today.

License to innovate Breakthrough strategies for social impact 11

Figure 1: Five social innovation strategies

FIVE SOCIAL INNOVATION STRATEGIES
1

2

3

4

5

Invest in external solutions
Invest to advanceexternal solutions
already demonstrating
profitability andimpactEngage a network
Engage innetworked problem
solving to identify
and test possible
solutions to scale

Accelerate externally
Secure external
services toaccelerate solution
development

Sandbox solutions
Advance internallydeveloped solutions
into a viable proof ofconcept through ashared proving ground

Innovate in-house
Advance apipeline ofsolutions fully
in-house

The definitions in figure 1 and the examples that follow will
illustrate what each of these strategies entails in practice,
but first it is worth noting that there is no “best” or “worst”
among these options. Rather, a company’s motivation,
capabilities, and desired role in social innovation will all
help determine the organization’s “best fit” strategy (orcombination of strategies). A company may pursue a
combination of strategies to support its diverse portfolio of
offerings.
“Motivation” refers to how social impact reflects theculture and mission of the organization and is prioritizedby leadership. A company that wants to be known for
impactful work may choose to spearhead the entire social
innovation process 5 , whereas a company just looking
to dip a toe into the space or try out a variety of different
1 But
emerging solutions may opt to invest in startups (#1).
aspiration is insufficient; certain skills and resources may beneeded that lie outside a company’s current capabilities.
When a company sets its sights on tackling a pressing
societal issue it is often with the recognition that the
problem has earned a reputation for being intractablebecause of the significant resources, capabilities, andtimeline that extinguishing it requires. Increasingly
companies are finding creative ways to work across sectors
and ecosystems and even activate individual contributors
2 In
through networks dedicated to a shared goal (#2).
some cases this level of collaboration will surface andhelp develop solutions that achieve the desired progress;
this has proven true for a host of efforts ranging fromnutritionally fortifying staple grains and improving crop
resilience during the “Green Revolution” in the second
half of the twentieth century to more recent efforts tomake cities more energy efficient and healthy. In the caseof the former; however, it helped to have the Rockefeller
Foundation commit more than $100 million in funding
over 15 years to shepherd the international cooperationand cross-disciplinary research required to engineer a more
nutrient-dense variety of rice.27
In some cases where the scale of investment required(combined with questionable financial returns) precludes
companies from individually getting involved, a joint
venture that pools resources and expertise to help
overcome systemic barriers can turn the venture into
a compelling proposition 4 . Often referred to as a“sandbox,” shared proving grounds are an approachtraditionally favored in capital-intensive, high-techindustries such as defense and, most recently, theautomotive industry as companies develop self–driving
vehicles. Renewable energy and healthcare are two
spaces in particular where this strategy may accelerate thedevelopment of new market-based solutions.
Choosing the “sandbox solutions” strategy assumes
that a company has a solution ready to refine, but somecompanies hire firms to help develop the solution. Perhaps
a company observes unmet demand for a specific healthsolution in India, but recognizes that its limited familiarity
with the laws and market conditions in the region may
hinder its efforts. The company may therefore choose to
expedite its product development and market entry byengaging an accelerator that brings relevant expertise 3 .
A company’s “role” in this context hinges on the extent
to which it can (and chooses to) independently produce
viable solutions that deliver the desired impact and growth,versus engage other partners in the solution
development process.

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Partnerships and the five strategies
5 a company engages an external contributor in some capacity. In some cases
In all except the in-house strategy (#5),
1 . But others involve more give-and-take andthe exchange is more transactional, such as investing in a fund #1
collaborative problem solving, essential elements of a sound partnership.
3 a partner with complimentary competencies is able to help develop the
To help accelerate a solution externally (#3),
idea in ways the company alone could not and the fee-based nature of this work makes a service provider a trading
partner. Engaging a network 2 and sandboxing solutions 4 entails assembling a whole combination of peerlevel partners; in the case of the former to experiment with early-stage solutions that may realize different kinds ofimpact on a common issue and in the latter to test a certain solution in a shared environment to overcome systemic
barriers. As such, partnerships are a component of multiple strategies.

The fundamental question of how much ownership acompany takes of the innovation process, and which
strategies to pursue, is relevant to everything the company
produces. To make or to buy, to compete with or toacquire, to hire help or to team with others, the company’s
self-assessment and scanning of the external landscapewill determine what phases of the innovation process thecompany should “own” for its investments and offerings.28
Each of the five phases in figure 2 is an essential step inthe process of originating, developing, and launching a
new solution. A company may prefer to specialize in apart of this process, perhaps scaling numerous solutions
once there are viable proofs of concept. Alternatively, thecompany may differ its strategy depending on the typeof solution under development, depending on its area ofexpertise. In figure 3 each of the five strategies is charted
against the parts of the innovation process typically run by
the company versus external partner(s).

Applying a classic innovation frame to the five social
innovation strategies aims to highlight how internalversus-external ownership of the process varies acrossthe strategies. However, although the five phases may be
identical to a typical innovation process, the realities ofcrafting a solution that measurably improves outcomes
often carries additional challenges. The capabilities
required to innovate for social impact might fall outside
a company’s core competency, whether that is due tothe challenges that come with serving remote and/or low
income segments, the need for specialized ethnographic
and human-centered awareness of a population’s uniqueneeds, or the complex ecosystem of organizations involvedin addressing the selected societal issue(s), among otherpotential sources of complexity. Any combination of thesefactors may lead a company that is accustomed to runninga full innovation process in-house to seek outside support
earlier in the social innovation process. The considerations
that are unique to social innovation for each strategy will
be explored further in the next section.

Figure 2: Five phases of innovation29!
Problem
identification

Ideation

Solutiondevelopment

Proof ofconcept

Scale anddiffusion

License to innovate Breakthrough strategies for social impact 13

Figure 3: Ownership by innovation phase for the five strategies
Innovation process

Externaldependent

Internaldependent

1

Invest inexternal
solutions

2

Engage a
network3

Accelerate
externally4

Sandboxsolutions

5

Innovate
in-house

Problem
identification

Ideation

Solutiondevelopment

Proof ofconcept

Scale anddiffusionCompany-run

Led by external partner(s)Building on the distinctions that were just made between the five strategies, each strategy will now be more fully defined.
Examples based on our interviews help to illustrate what motivations have led companies to each strategy, the various
forms it can take, and how companies are acting on a strategy.
These examples offer a starting point, with full recognition that the ways each of these strategies manifest is limited onlyby the creativity of the companies pursuing them. The common advantages and disadvantages of each strategy, keys togetting it right, and pitfalls that surfaced in our research are also described. This detail can help inform a company’s choiceof which strategies represent a promising next step towards achieving social impact through new business offerings.

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1 Invest in external
solutions
Invest to advance external solutions already demonstrating
profitability and impact

This option is the most transactional, straightforward
approach of investing in intellectual property (IP)-creators
outside the company through corporate venture capitalor a different co-investing method. Corporate venture
capital refers to a “business development activity within theparent company that identifies, incubates, and accelerates
ideas, technology, and innovation for key business lines”
and typically involves an equity stake.30 In some cases,
corporate venture capital can act as a pipeline for laterstage investment by corporate venture capital funds.31
Other methods of investment may include impact
investing, limited partnerships in funds, and otherfinancing of social enterprises, among an expanding set
of investment options. In recent years some long-standing
financial institutions have been increasingly eager to use
their expertise and resources to address social challenges.
Driven by demand from traditional investors eager to utilize
their capital for development aims alongside investment
returns as well as demand from philanthropists andinstitutions for sustainable capital, JPMorgan Chase hascommitted $68 million to impact investments.32
Together, we refer to these different forms of investments
and co-investments as the “invest in external solutions”
strategy 1 . This model subscribes to most of theconventions a company typically follows to source IP,
only in this case with social and environmental criteria
applied to determine which deals go through. This gives
a company breadth across a variety of areas of innovation
they could not touch through internal resources, allowing
the firm to take more modest risks while staying focusedon its primary business.
This approach also allows the company to support
solutions that have matured to the point of demonstrating
measurable impact, a stage that could be years in themaking if the company were to develop a solution fromscratch. For this reason, some companies may determinethat the highest impact can be achieved by scaling provensolutions. Where evidence is limited, the company may
choose to invest in promising, not-yet-proven solutions
with the requirement that results be captured to prove theefficacy of the solution, a critical stage-gate in its
expanded adoption.

Investments may help a company identify where its existing
offerings could combine with external capabilities. In rare
instances, an acquisition may occur to bring promisingcapabilities in-house. DSM, a global life science andmaterials science company, uses its corporate venturegroup as an “outside-in” innovation arm, investing in 50+
startups since 2001 in exchange for a minority equity
stake. DSM often partners with the startup to incorporate
breakthrough ideas into its own offerings. For any new
businesses DSM innovates in, each target must satisfy
the company’s “people-planet-profit” criteria, with funds
invested through the DSM’s corporate venturing coming
directly from the company’s balance sheet.33
As a high-quality manufacturer in highly regulated
domains (nutrition, medical, advance materials), DSM is acompelling counterpart for startups looking to scale theirproduct and DSM likewise benefits from widening thediversity of offerings it can deliver at scale, including new
business models and access to adjacent markets.34
The company embraces the infusion of fresh thinking fromoutside innovators because the very qualities that makethem successful in manufacturing—precise processes,
conservative decision making, and clearly definedorganizational structures—make it sometimes challenging
for intrapreneurs to develop new offerings that deviate
from how the business traditionally operates.
“Cultivating intrapreneurship and multidisciplinary work isa challenge in any large company and can be even harderin older companies that bring a strong historic culture. At
the same time, if the company is too eager and abrupt
in upturning that historic culture there are losses andalienation that can happen as well” reflects Pieter Wolters,
DSM’s managing director of venturing.35 For this reason,
DSM has an internal Innovation Center (which is the homeof its corporate venturing activities) and has taken steps
to explore using external accelerators and incubators(strategy 3 ) that could strengthen intrapreneurshipwithin DSM, without compromising the elements of thecompany culture that have made it successful.36

License to innovate Breakthrough strategies for social impact 15

Invest in external solutions
What distinguishes this strategy from the other four

ExamplesA company typically wants a low-risk means ofaccessing and supporting new solutions that are alreadydemonstrating strong signs of growth and impact.
Leadership does not want to take staff away fromtheir current business priorities, whereas the other four
strategies tend to involve greater internal time investment.

• Corporate venturing• Impact investing• Co-investment in commercial funds

Common trade-offs of this strategy
Advantages• Taking numerous small bets can allow a company toengage with a wider spread of innovations, potentially
serving as a defensive mechanism against disruption• Cultivates a rich ecosystem of small innovators thatcan be trade partners and potentially acquisitions of thecompany• Lowers investment risk by delivering a more fully baked
solution with data supporting the solution’s efficacy• Allows for staged investment opportunities

Disadvantages• Does not support a culture of intrapreneurship andinnovation in the same way more internally focusedstrategies could• The company must negotiate and compete withother funders for top innovators and IP, potentiallypaying a premium or missing out on promising IP thatcompetitors may acquire instead

Key considerations• Consider investments that appear on track to deliver the desired impact and returns within the company’s
funding cycle, but recognize that longer time horizons are the norm in (impact) investing. DSM chooses toinvest through venturing as a way of committing to startups for at least one multi-year round of funding and regularly
invests in consequent rounds if the startup’s business and IP perform well in the initial round. The predictability of thetimeline helps with allocating capital and reassessing the portfolio strategy on a regular basis.37• Due diligence may yield fewer comparable deals, thinner data, and variance in how impact is measured,requiring greater communication with investees and a more bespoke diligence process than typicaltransactions. Companies accustomed to early stage venturing will likely be less surprised by the challenges ofinvesting in unique, socially impactful business models that are not easily comparable to other transactions, buteven those companies may struggle in optimizing for improvements in social and environmental outcomes, as many
companies are relatively new to making investment decisions based on this criteria.
Watch out for• Making a number of investments that are not connected to the core business or that do not yield meaningful
results. While making a number of investments at a time is feasible under this strategy, companies must be
intentional and calculated in how they do it.

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2 Engage a network
Engage in networked problem solving with other organizations to
identify and test possible solutions to scale

For this strategy, a company determines that acting
alone will not achieve the intended impact and market
development that could occur through collaboration
between others within an industry or even across industries
and sectors. This may involve developing strategic
partnerships around shared objectives, or undergoing an
open innovation process to advance progress on a social
issue. Firmenich, the world’s largest privately-owned
company in the fragrance and flavor business, strongly
believes in partnerships as a means of pursuing business
offerings that yield social impact.38 It most recently
co-founded the “Toilet Board Coalition,” together with
Kimberly-Clark, Unilever, and Lixil Corporation as well as 15
sanitation expert organizations, to foster the co-innovationneeded to accelerate sanitation solutions in developing
countries.39 Their goal is simple but daunting: to catalyze
a robust business sector to deliver sustainable and resilient
sanitation to the 2.4 billion people who lack it, of whichalmost 1 billion defecate in the open, and in turn improvehealth, productivity, and living standards.40

effort to achieve zero net deforestation by 2020 throughimprovements in how the soft commodities palm oil,timber, soy, and beef are procured. While the participantsin the compact value the positive environmental impactof this commitment, there is also likely positive financial
benefit to such a move. Palm oil that is certified sustainablecommands a premium and research from WWF foundthat even greater financial gains often come from theimprovements made in operations, documentation
systems, and labor relations among other internal factors.
Ultimately, these improvements enable participants to be
more sustainable over time.42

Networks are also a mechanism for those in the same
industry to tackle precompetitive barriers or establish
standards where it is advantageous to work together. For
instance, while sustainability has long been a priority areafor Santander that has informed and influenced its own
decisions, the bank recognized that in some situations
greater progress could be achieved by working with otherinternational banks. An example of this is the Banking
Environment Initiative.41 As part of that collaboration, thebanks committed to the Soft Commodities Compact, an

License to innovate Breakthrough strategies for social impact 17

Engage a network
What distinguishes this strategy
from the other four

ExamplesA company has not yet committed
to a single solution and wants to
explore various ways a societal
problem might be addressed,
drawing on the collective expertiseof other contributors.

• Coalition of trading partners or industry peers focused on a common objective(e.g., tech companies focused on expanding internet access)• Issue-focused ecosystem (e.g., the RE-AMP network focused on Climate
Change)• Social Lab• Open innovation crowdsourcing platform (e.g., OpenIDEO, Launch.org, Kaggle)

Common trade-offs of this strategy
Advantages• Builds on combined assets and capabilities of many
diverse players• May solve the problem faster, as many areexperimenting with solutions• Makes it easier to recognize a company’s own blindspots• Could shift societal or industry-wide standards andgarner public support

Disadvantages• Many competing objectives and ideas can slow
progress• Difficult to reward and attribute credit to the mostproductive contributors; incentives are collective rather
than individual

Key considerations• Find ways to achieve equitable distribution of responsibilities so there is a fair give-and-take among
contributors. Governance can be complex when individuals from multiple organizations are working together. A
clear value exchange of capabilities offered by each partner can be critical to ensuring long-term buy-in. In the caseof The Toilet Board Coalition (TBC), multinational businesses are experts at delivering complex systems with speed
and scale. Promising sanitation business models need access to capital and skills building to grow and development
experts understand the most urgent priorities for sanitation delivery in underserved markets. The TBC is a business-led
public/private partnership that brings all of these pieces together. Companies invest business expertise and capital toaccelerate innovation and promising business models and the public sector leverages private sector engagement on
this important issue while providing the check and balance to ensure joint focus on the investment priorities as set by
the Sustainable Development Goals.43• Lightweight, flexible solutions work best when the goal is wide participation among participants with diverse
needs. CEMEX, a global supplier of building materials, leverages this approach through Construyo Contigo, an
initiative that enhances low-income families’ self-building capacities by offering the training, financial solutions, andtechnical assistance needed to construct their own homes, enabling them to transform their living conditions. “Eachcommunity is different so our models [e.g., partnerships with government, NGOs] have to be very flexible,” recounts
CEMEX’s Director of Corporate Social Responsibility Martha Herrera.44
Watch out for• Failing to incentivize and reward high performing contributors who may harbor resentment that their efforts
are treated the same as less active contributors. Establishing multi-stakeholder partnerships where the level ofcapability varies significantly across participating organizations. If there are substantial differences in what each party
can offer and standards of performance, participants will struggle to see eye-to-eye and it can become an ongoingsource of friction.

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3 Accelerate externally
Secure external services to accelerate the solution development

If conceiving a new business concept that brings financial
and social impact presents a challenge, executing
against that vision presents a different scale of challenge
altogether. For this reason, accelerators have emerged
to help early-stage ventures avoid common pitfalls andsubscribe to best practices, based on expertise that theaccelerator has in bringing businesses from one stage ofmaturity to the next.
Accelerators assist with a broad spectrum of needs thatare required for a solution to scale, through the accelerator
itself and its often-robust network that spans various
relevant areas of expertise. Those that specialize in businessmodels that yield social impact are sometimes referred to as“impact accelerators” and are a close cousin of the startup
accelerator that has proliferated in recent years.
A 2013 landscaping exercise conducted by The Rockefeller
Foundation and Monitor Deloitte found that over 160
accelerators focused on impact enterprises exist in the
United States, Sub-Saharan Africa (SSA), and Southeast Asia
alone. However, accelerators focused on social innovation
are quite new. The “impact accelerators” surveyed throughRockefeller’s work were, on average, less than five years
old at the time.45 Accelerators that target large companies
but remain external are even newer. Of those interviewed,
a few companies are currently exploring the prospect,
although all are in the early stages.

DSM has interest in engaging with an external impact
accelerator as a means of bringing together the social
innovation leading practices from the external landscapewith the technical expertise of the company.46 Part of thegoal in developing a solution through an accelerator isthat once it is developed beyond proof of concept, it could
be reintroduced within the company and, if supported,
invested in further and taken to market. For companies
that excel at originating new offerings but struggle to bringthem to scale, an external accelerator could help productize
the concept and implement a scaling strategy.
The intrapreneurial individuals we spoke to who are
currently exploring this model were intrigued by the notionof separating an idea from the internal conditions that
may kill it before its merits can be demonstrated, while
keeping it close enough to the company that if developedand successful it would be viewed as a “win.” “Being able
to point to a few success cases is critical to changing theculture and helps those inside a company see the value oftaking longer term, riskier bets,” shared Claus Stig Pedersenof Novozymes.47
Some who pursue this strategy are looking to advancetheir own socially impactful product concepts, while others
might be looking to collaborate with other companies andpool investment dollars on a shared project.

License to innovate Breakthrough strategies for social impact 19

Accelerate externally
What distinguishes this strategy from the other four

ExamplesA company has a business offering in mind that it wants to bringto market (unlike the first two strategies), but lacks certain in-house
resources and/or support to experiment with and develop the solution.

• Accelerator• Design firm
• Advisory services (e.g., consulting practice)Common trade-offs of this strategy
Advantages• Easy to get started with limited risk of downside due
to limited cost in the early stages• Likely follows an effective, demonstrated innovation
process• Allows for less bounded experimentation given
distance from company• Typically involves lower investment than in-housedevelopment• Benefits from external expertise• Allows for staged investment opportunities

Disadvantages• Can lack transparency and/or company control of theprocess• Potentially poses difficulty in reintroducing innovation
into the company, if over time priorities shifted orleadership withdraws adequate support• Is not conducive to building a more innovative
culture inside the company itself

Key considerations• Select a service provider whose strengths best complement the company’s internal capabilities. In this sense
picking an accelerator or consulting practice likely resembles other business partner relationships a company pursues.
When taking a loan for an infrastructure project, for instance, a company may choose to go with a development bankfor the longer time horizon loan, environmental and social criteria, and measurement capabilities.48 If a company isseeking assistance in taking a human-centered, creative design approach for a new physical product, an innovation
firm may be a good choice.49
Watch out for
Outsourcing a solution concept because it is convenient, when perhaps it shouldn’t be pursued at all. If key
stakeholders in the company can’t understand the value of the potential solution, and appear resistant to the idea,
investing the additional resources in developing a proof of concept, even if the costs are relatively low, would likely be awaste of resources.

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4 Sandbox solutions
Advance internally developed solutions into a viable proof of concept
through a shared proving groundIn the quest to develop solutions that address societal
issues, pilots abound that never seem to achieve scale.
Nonprofits in the social sector have struggled for decadeswith this, which in recent years has sparked interest in
adapting business principles for achieving scale through“market-based solutions.” Yet when a company seeks
to single-handedly tackle an entrenched issue, it may be
struck by the realization that the complexity and systemic
nature of the issue require the coordinated efforts of many
stakeholders, including entities it may have never interacted
with, from multilateral development organizations tophilanthropies to regional non-governmental organizations.
In some cases this may require engaging a combination ofthese actors from the outset of developing a new solution,
leading a company to pursue the “engage a network”
strategy.
However, if the company has what it believes is abreakthrough solution already developed, it may be readyto “sandbox” or pressure test the solution with outside
input to make sure it is ready for use by customers andwill achieve the desired social impact. After all, the stakes
are higher in a social impact venture, particularly if thedesired impacts relate to the health or safety of thecustomer. In the health domain there is a long history of
conducting rigorous randomized control trials to validate
the health outcomes a medical intervention achieves
and that evidence-based mindset has extended to otherdomains of social impact in recent years. Evaluation ofa solution’s effectiveness is part of “sandboxing,” but isonly one aspect. The company may want external input tomake sure that the product or service is customized to fit
the needs of a certain audience and adheres to standards
and regulations. There is also the matter of making thesolution available to and adopted by the desired audience,
which other stakeholders could offer valuable insight into.
As such, engaging external services or partners once asolution is ready to “sandbox” can take a variety of forms
but is done with the singular intent to prepare the solution
to address a real need in the market in a way that positions
it to scale quickly.
In Toronto, Canada, a former hospital surrounded bygovernment offices houses the MaRS Discovery District,
where systemic problems are met with system-wide
solutions. Socially minded startups are co-locatedwith pharmaceutical and tech companies, with active
involvement from government, creating a cross-sector
support system for emergent solutions. In the healthcare
system, this can be particularly valuable, as developing
the right evidence to obtain government approval, secure
funding, and drive adoption typically operate as separate,cumbersome processes. The MaRS Excellence in ClinicalInnovation Technology Evaluation (EXCITE) program
integrates these processes, enabling program participants
to earn the “EXCITE core evidentiary bundle” for both
regulatory and licensing approval and reimbursement andpurchasing reviews, which is critical for securing adoption
in the health system.50
This strategy is the newest one to the social impact
arena, even though government has worked withcompanies pioneering new aerospace, defense, andhealth technologies for decades to help them overcome
industrywide hurdles that would otherwise slow the paceof innovation. For this reason, companies looking to
explore this strategy further would benefit from exploringother sectors where this approach has been pursued.

License to innovate Breakthrough strategies for social impact 21

Sandbox solutions
What distinguishes this strategy from the other four

ExamplesA company has developed a solution to the best of
its abilities but faces external obstacles that are best
addressed by pooling resources and capabilities withothers to develop the new market.

• Joint ventures and strategic partnerships to bring asolution to market• Evaluation services• Market entry advisory services• Government agreements(to navigate regulatory challenges)

Common trade-offs of this strategy
Advantages• Allows company to pool expertise with otherorganization(s)• Increases pool of capital available through co-funding
models• Allows for fairly complex, free-form exploration andexperimentation• Enables company to test fit and impact of offering in
the external landscape• Brings solutions to market that may not otherwise beable to overcome systemic barriers

Disadvantages• Can be challenging to introduce and trust new
partners late in the innovation process• Key stakeholders may be resistant to or take too longto engage in collaboration• Creates vulnerability that others will see solutions before
they go to market, generating potential for imitation• Even with additional support, certain systemic barriers
may prove too challenging to overcome

Key considerations• Align on the systemic barriers that must be overcome to be successful. If one company is focused on thechallenges of reaching a target population while another is preoccupied with government regulation, each will bechasing separate goals and it may prevent the joint effort from being worthwhile for either party.
Watch out for
The misunderstandings and disagreements that may occur when contributors bring together their solutions late in theprocess, without explaining the earlier thinking that went into them.

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5 Innovate in-house
Advance a pipeline of solutions fully in-house

Companies that are capable of spanning the full process
and innovating in-house often choose to do so. For PepsiCo
this has meant significant increases in R&D spending on
health-focused research to reduce the added sugar, salt,
and saturated fat content without compromising flavor ofmany snacks and beverages in its 3,000 product lineup. The
shift started at the top leadership levels with Chairman and
CEO Indra Nooyi, who took a bold stance from the outset,
stating when she took the position in 2006: “The creationof [a] Global Nutrition Group is part of our long-term
strategy to grow our nutrition businesses from about $10
billion in revenues today to $30 billion by 2020.”51
At times the move towards healthier offerings has startledshareholders and loyal customers alike who have expressed
concern about their favorite (and therefore highly
profitable) foods changing. Initially stock prices tumbled
and financial analysts questioned the choice, but Nooyi’s
twenty-one years with the company and perspective on
the future gave her conviction that the focus was both
the right choice for the health benefits to consumers andthe financially savvy one in the long run. As the company’s
former chief financial officer, others inside the organization
trusted her instinct and understanding of delivering value
to shareholders.52 Nine years in, the company appears tohave turned a corner and healthier foods now accountfor 20% of revenues and are a growing share of thecompany’s portfolio.53
Some companies favor more gradual experimentation
before betting the proverbial farm. Rather than redesigning
the company’s R&D infrastructure the company may
instead opt for an internal incubator to test new ideas.
For Dr. Maarten van Herpen, Philips’ head of the Philips
Africa Innovation Hub, the idea to pursue an incubator thatbrings BOP-focused innovations to market was almost a
coincidence. With more than 100 granted patents to his
name, and after founding two corporate ventures, Maarten
is accustomed to being the inventor and intrapreneur,

yet now finds himself in charge of roughly 40 inventors
and social intrapreneurs at Philips’ Kenya-based incubator
developing inclusive businesses that range from community
health clinics to the tools that are used inside them. One
such product is a low-cost Doppler-ultrasound fetal heart
monitor that can withstand the harsh conditions in a region
where other low-cost options break frequently. Philips’
device uses small amounts of water instead of gel and awindup mechanism for backup power in the absence ofoutlets, both features that suit the environment in Kenya.54“The most important thing about being frugal is being
locally relevant,” Maarten recounts.55 He is well situated to
be in touch with local needs, living in Kenya full-time foralmost a year with his wife and adopted Kenyan daughter.
His daughter was the original impetus to move to Kenya,but early on Maarten and his colleagues at Philips Africa
and Philips Research realized the unparalleled opportunity
for true inclusive innovation that existed in the region.
In this part of Africa there is a huge shortage of doctors
and that is not going to change anytime soon, sincedoctors can’t be trained fast enough. So others must be
empowered to reduce the burden on them and carry some
added responsibilities. “In Kenya we have the opportunity
to create completely new solutions and new ways ofworking; this makes it much easier to create breakthroughinnovations.”56 Maarten is optimistic that products
pioneered in Kenya can translate into breakthroughs thatserve other parts of the world facing similar cost constraints
and shortages of doctors.
While different in their execution strategies, PepsiCo andPhilips answered the question of whether to “make or buy”
social innovation with a firm commitment to “make” theirown offerings in house. By doing so, both illustrate what
we refer to as the “in house” strategy 5 . This was themodel that the supermajority of interviewees aspired to,but only a few felt their organization was ready for.

License to innovate Breakthrough strategies for social impact 23

Innovate in-house
What distinguishes this strategy from the other four

ExamplesA company wants control of the end-to-end innovation process and has • Part of a centralized R&D department
the right conditions and capacity to develop solutions independently,• Separate incubator dedicated to generatingwhereas in the other four strategies external contributors are critical tosocial and environmental results
developing the new solution.
Common trade-offs of this strategy
Advantages• Closely aligns with other company and leadershippriorities• Given proximity to the rest of the business, is often
easier to integrate• Effectively utilizes company’s full range of capabilities
and business functions• Can yield new business models applicable to thebroader company

Disadvantages• Is subject to much of the bureaucracy and stalling that
often accompanies a large corporate culture• May be so influenced by a risk averse culture
or company conventions that offering is not truly
transformative• Can create incentive challenges internally (e.g., How topunish for inactivity and not for failure?)

Key considerations• Secure buy-in from the highest levels of leadership throughout the organization. Running the innovation
process entirely in-house tends to present more opportunities for a new idea to be discredited or for key stakeholders
to lose interest before it can be proven effective. Consider once again the impact of Indra Nooyi’s commitment towellness at PepsiCo and the force with which acquisitions were made, new scientists hired, and changes to productofferings were made.
• Anticipate that the social innovation team will likely need to operate differently than other parts of thecompany and establish lines of reporting to enable this. A company can structure the lines of reporting to either
provide direct leadership support or exert cautious control on innovation activity, which reflects how integrated
innovation processes are in the company. When exploring new territory such as designing social impact offerings,
certain established processes and metrics may need to bend or disappear completely to allow for experimentation,
which often involves escalating to leadership. Escalations are typically more frequent and effectual when the managerof the social innovation activity reports to someone in leadership who has the authority to change requirements
and processes. In the case of Maarten’s role running the Philips incubator in Kenya, reporting to the Africa CEO andthe company’s executive committee has given him the support needed to pioneer fundamentally different businessmodels that incorporate services, a new direction that could influence other business units in the company.57
Watch out for“Blind spots” that can arise when innovating internally; not only should companies understand the new, uniqueconsumers they are serving, but it’s crucial for companies to avoid dismissing important external partners. The Tata
Group, an India-based global enterprise of over 100 operating companies, lives by the words of its founder: “Thecommunity is not just another stakeholder but the reason for our existence.” So many Tata companies have beenaround for several decades and as a result, they have close relations with communities around their plants.58
Each of these strategies offer their distinct opportunities and challenges, with some strategies offering a greater trackrecord and lessons to learn from than others. While innovating in-house and investing in external solutions offer anabundance of examples, sandboxing solutions and utilizing a social impact accelerator represent significantly newer
approaches. The next section will offer a lens for considering which strategies may be the best fit for a company.

License to innovate Breakthrough strategies for social impact

24

Recognizing a company’s
readiness for social innovation
Certain strategies among the five identified are best suited
to certain environments. The characteristics of a company,
its industry, and the broader landscape all play a role in
a company’s ability to integrate growth and impact in a
strategy. In companies where certain preconditions topursuing social innovation are lacking, it is likely worthbuilding the foundational conditions first before embarking
on an ambitious social innovation strategy, to avoid pitfalls
that interviewees cited as all too common.
The most consistently recognized characteristics thatcompanies identified as critical were leadership priorities
and culture. If a company’s executives and those within theorganization do not align around an opportunity, obtaining
support from other stakeholders, including shareholders
and consumers, can prove difficult and seem inauthentic.
Once a common vision is agreed to, there is also thequestion of a company’s ability to adapt towards thattarget. Companies must build in the necessary governancestructure and incentives to support their goals. Those witha history of reinventing themselves and their offerings tochange with the times are at an advantage.
Leadership often sets the tone for a company’s willingness
to take risks and attitudes about failure, with specificattributes of the leaders themselves influencing how
innovative a company is. For instance, research shows thatcompanies whose leaders exhibit at least three types ofinherent (ones you are born with) and acquired (gained
from experience, such as educational background andgeographic areas where an individual has worked) diversity
traits tend to out-innovate and out-perform others.59
The state of the global economy also has an important roleto play. Periods of high volatility may compel companies
to try and de-risk investments or favor more conservative
positions. Others opt for less uncertainty even without
particularly fragile economic conditions. For this reason,
a company’s appetite for risk will have a bearing on
their willingness to pursue social impact. Novozymes’
Pedersen believes in the power of an incubator like DIVA
to “take away some risk” if the organization isn’t ready to
independently undertake a promising but complex newoffering.60 A model like DIVA’s allows the firm to makestaged go or no-go investment decisions at junctures in theinnovation process, allowing the company to systematicallyreevaluate whether to expend additional resources on the
project. Alternately, leveraging existing personnel has been
key to Citi’s efforts in the past five to seven years given the

resource-constrained position of many financial institutionsin the wake of the 2008 financial crisis. To realize greater
financial inclusion and environmental impact, the company
encouraged existing employee teams to consider clientneeds from a different angle, resulting in initiatives like theircommitment to lend, invest, and facilitate $100 billion insustainable financing.61
Then there are the characteristics typically conducive
to social innovation, with a firm’s prioritization of bothfinancial and social return on investment long term ranking
top among them. Even within a single company the way
social and financial returns are weighted varies dependingon which part of the company’s portfolio is concerned. As
Michael Fuerst, senior manager, corporate responsibility
strategy and innovation at Novartis describes, offeringsand expected returns vary depending where a target
population falls in the global income distribution pyramid.
“We follow a portfolio approach when trying to meet theneeds of patients in different social-economic segments in
a commercially viable way. Beyond the established offerings
for high-income populations, in the middle income
segment and below we operate with a variety of accessmodels such as tiered pricing, shared-contribution models
with governments, or co-pay models with individual
patients. Specifically, in low-income markets we run social
business models that aim to generate a small profit orzero-profit models while meeting the needs of underserved
patients and strengthening fragile healthcare settings. In
the poorest markets, we have the same objectives but
try to achieve this with philanthropic interventions.”62
Some companies may choose to span the full spectrum ofsocial impact offerings like Novartis, while others may opt
to concentrate on a specific segment, such as one thatyields competitive market returns alongside social impact,
although it may preclude them from pursuing certain
high-impact opportunities with less profitable customer
segments.
Certain industries may lend themselves more to social
innovation. In analyzing Fortune 500 companies,
Deloitte’s Social Impact practice found that financial
services companies are most likely to focus on maximizing
shareholder value, while consumer products and healthcare companies surveyed tend to view offerings with social
impact as critical to their brand and growth strategy. The
specific types of solutions pursued also vary by industry.

License to innovate Breakthrough strategies for social impact 25

Companies consistently prioritize environmental sustainability the most across industries, while an objective like serving
communities was favored by financial and health care respondents that have a geographically dispersed footprint.
Who a company serves also influences a company’s choices. Business-to-consumer companies are typically under
greater pressures than business-to-business companies to be socially responsible, as more consumers factor social andenvironmental considerations into their buying decisions. However, some companies such as Firmenich recounted thatcollaborating to achieve social and environmental outcomes has strengthened their relationships with buyers and those in
the value chain, driving new business.63
When considering if a company is well positioned to embark on a strategy for growth and impact, consider thefollowing conditions:

Does the initiative connect with the culture and values of the organization and its
stakeholders?
Before launching a new initiative, it is important to engage those in the company and trusted colleagues outside thecompany in discussion to help refine the concept, flag potential concerns, and offer recommendations. In recent years
companies that have launched initiatives too quickly, from a new internal program to a public, issue-focused campaign,
have faced backlash from employees and the public alike when the initiative does not seem consistent with the company’svalues, or appears at odds with the company’s current practices.

Does the team running the social innovation process have a realistic, honest sense of
the company’s strengths, potential blind spots, and areas where external support isneeded?
As a company pursues new strategies certain limitations may surface that the company will either need to adapt to or end
a project. Growing from those learnings, and accepting occasional failures involves humility. When MASISA committed
to develop inclusive business models, more than ten pilot projects were implemented along Latin America operations,most of them including carpenters. Some of these ten models had to be stopped, because of their small business scale or
because they were not linked to MASISA’s business. That selection process took time and effort and left a sense of failure
amongst those who supported the eliminated models. On the other hand, the experience led MASISA to create a networkof at least 100,000 carpenters by 2025. Although MASISA is deeply familiar with this segment of clients after years ofserving them, positively impacting these entrepreneurs and measuring the result has nevertheless been challenging.64

Is the company ready to move from focusing solely on the functionality of its offerings
to evaluating the impact they achieve?
Customer input becomes even more important when they hold the key to using a product or service in a way that
produces a certain social outcome, such as healthier consumption habits or improved literacy. As serial tech entrepreneur
Desh Deshpande has observed, “For technology ventures, innovation plus relevance is equal to impact, but for social
innovation it’s the opposite: relevance plus innovation equals impact.”65

Is the company prepared to invest the additional time and resources required to drive
new customer adoption and achieve impact?
Often opportunities for significant social and environmental impact, as well as market development, involve educating
consumers and strengthening ties to communities that may be hard to reach. For instance, when Schneider Electric makes
minority equity investments in social enterprises and startups, it invests for five to seven years, longer than traditional
private equity, recognizing that it can take longer to both bring impactful offerings to market and measure their associatedimprovements in social outcomes.66

License to innovate Breakthrough strategies for social impact

26

Choosing the “best fit” strategy
The companies that embody each of the five strategies did
not happen upon these paths as the inevitable next act of
their current business. Some have made a larger departurefrom precedent than others, but every case required theclassic balancing of advantages and disadvantages tomove in a new direction. Each netted those tradeoffs withenough anticipated advantages that they were able toproceed with a new approach.

mention the performance of competitors and others in theexternal landscape, also weigh in, and may influence theextent to which the company experiences the “demand”
and “supply” side pressures described at the outset of thisreport.
To demonstrate how a company may navigate the manyquestions that may help determine its “best fit” strategy,
figure 4 represents an illustrative decision tree of common
decisions a company typically makes when selecting astrategy. Implicit within the decision tree is the judgementof which conditions and requirements represent the “makeor break” criteria when choosing a particular strategy,
based on the conversation and input received through our
primary research.

Although a company’s capabilities across the five phasesof the innovation process make certain strategies morefeasible than others, other important considerations shapeits choices. Simply pursuing what is possible, particularly
for the most versatile and well-resourced companies,
would likely lack focus and risk extending the company indisparate directions of questionable value.

Of course, more must be considered than the questions inthis decision tree. A company should do its own calculus in
deciding the strategies that stand to define its future andcompanies vary widely in how a destination is decided andpursued. Between the considerations introduced in thisreport and those a company prioritizes based on its own
goals, a company can select the strategy or combinationof strategies to enable it to deliver unprecedented social
impact on top of financial returns.

Plenty of highly innovative companies that garner top talent
and would seem perfectly suited to craft solutions in-house
opt to engage in networked problem solving, surfacing
novel solutions that would not originate in their own
business, or decide to enlist a consulting firm or accelerator
to pressure test and refine a product before it is taken tomarket. A company’s motivations and desired roles in theinnovation process, as previously introduced, are integral
to its choice of strategy. The internal conditions, not to

Figure 4: Determining the best fit strategy for your organization
Does your company have asolution in mind to achieve
high-growth and high-impact?

Yes, we have
solution(s) in mind

Yes

Are there the resources andcapacity needed to advance thesolution(s)?

Does leadership support using
resources and capacity forsocial innovation?
Yes

Are you looking for solutions withproven efficacy, or are you looking
to surface new potential solutions?

No

We need to findsolutions thatare more
compelling thanexisting options

Does the company want tobuild its capacity to innovate
new solutions?

No

Not necessarily

YesNo, we’re looking to
the external landscapefor inspiration

Is there an interest in
co-developing solutions?
Once a solution is developed,
is the company able to bring it
to market and to scale?

Yes

We think so!

Innovate in-house

Accelerate externallyNo, externalbarriers still
stand in theway

Sandbox solutionsShow us theevidence!

No

Yes

Yes
What about
investing in othersolutions?
Yes

Engage a network

Are there resources
to invest in scaling
the solution?

Invest inexternal solutions

No
No

Take no action

License to innovate Breakthrough strategies for social impact 27

Conclusion
Today a compounding set of reasons, many of which havebeen touched upon in this research, are driving companiesof all sizes to integrate social impact into their core business
offerings. Business as usual is no longer enough to satisfy
the demands of consumers, nor the shifting preferences ofa widening set of stakeholders. And yet new technology,
funding options, and legal structures equip businesses withan unprecedented opportunity to solve society’s biggest
challenges. While the journey is not an easy one, the highpotential rewards, low existing competition and high costof inaction make engaging in social innovation a promising
opportunity for many companies. Those that pick anapproach well suited to their organization stand to growthe business while making a meaningful contribution tosociety, attracting top talent in the process.
This report has introduced five ways that a company canbring innovative, profitable offerings to market that canyield social impact. It has identified how a company might
approach the decision of which strategy (or strategies)
to pursue and some key conditions that are important
to doing so effectively. The many companies featured inthis report are a testament to the immense creativity andprogress that is underway at the intersections of business,sustainability, and social impact and how this intersection
represents a significant opportunity for business.

Imagine the downstream effects of the financiallysustainable solutions that are being pioneered today andhow any number of these innovations has the capacity tochange the world. Renewable energy use becomes thenorm in more regions of the world, including the areasthat today are most dependent on oil. Water scarcity is
put in check through more efficient consumption andadvancements in how water is purified and reused. The
world’s poor are able to access essential health andsanitation services, saving millions of lives. Financial
services are extended to, and good jobs earned by, anemerging middle class that in turn pioneers the next waveof breakthrough solutions.
As underscored in the foreword to this report, we
believe that the business community, in partnershipwith governments, the social sector and citizens, has asignificant role to play in devising and scaling solutions todrive greater long term sustainability, successful financial
growth, and social impact. Through this paper, we
illustrated ways to move beyond business as usual throughbreakthrough strategies that can strengthen companies’
license to innovate, thereby enabling business to play atransformative role in society, for the benefit of all involved.
In these exciting times, and with so many dynamics at play,
we look forward to further engaging leading companies
to pave the way towards achieving the Vision 2050 of aworld in which 9 billion people live well within the limits ofour planet by mid-century.

License to innovate Breakthrough strategies for social impact

28

Contacts
W. Robert de Jongh
Deloitte LLP
rdejongh@deloitte.com

Filippo Veglio
WBCSD
veglio@wbcsd.org

Megan Schumann
Deloitte LLP
meschumann@deloitte.com

Davide Fiedler
WBCSD
fiedler@wbcsd.org

Alina Staskevicius Capanyola
Deloitte LLP
astaskevicius@deloitte.com

License to innovate Breakthrough strategies for social impact 29

Acknowledgments
Interviewees
BASF

Andreas Bluethner

CEMEX

Martha Herrera & Mario Gonzalez

Citi

Graham Macmillan

DIVA

Stefan Maard

DSM

Pieter Wolters

Firmenich

Bérangère Magarinos-Ruchat

The Multilateral Investment Fund of
the Inter-American Development Bank

Elizabeth Boggs Davidsen

MasisaFrancisca Tondreau

Novartis

Michael Fuerst

Novozymes

Claus Stig Pedersen

PearsonAmanda Gardiner

PepsiCo

Dan Bena

Philips

Maarten van Herpen

Santander Group

Etienne Butruille

Schneider ElectricThomas André

Toilet Board Coalition

Cheryl Hicks

Tata

Shankar Venkateswaran

Designer
Karen Ambari, Ashwin Ganapathi, and Nancy Holtz.
We would like to thank our colleagues in the World Business Council for Sustainable
Development and Deloitte’s Social Impact practice for their support and insights in thecreation of this report. Special thank you to Deepa Purushothaman, Eric Dugelay, John
Mennel, Larry Keeley, Nate Wong, Stasha Santifort, Tony Siesfeld, and Will Sarni.

License to innovate Breakthrough strategies for social impact

30

Endnotes
1

The Novozymes Report 2010,” 2010, http://www.novozymes.com/en/investor/financial-reports/Documents/The%20Novozymes%20Report%202010.pdf

2Stefan Maard, interview with the authors, November 24, 2015.

3

Deloitte analysis. “The Deloitte Consumer Review: Africa: A 21st Century View,” 2014, http://www2.deloitte.com/content/dam/Deloitte/ng/Documents/consumer-business/the-deloitteconsumer-review-africa-a-21st-century-view.pdf

4Maard interview.

5

John Mennel and Nate Wong, “Driving corporate growth through social impact,” Deloitte, 2015, p. 3, www2.deloitte.com/us/corporate-archetypes.html.

6Maard interview.

7

Steve Denning, “Peggy Noonan On Steve Jobs And Why Big Companies Die,” Forbes, November 19, 2011, http://www.forbes.com/sites/stevedenning/2011/11/19/
peggy-noonan-on-steve-jobs-and-why-big-companies-die/.

8David Rohde, “The Swelling Middle,” Davos 2012, Reuters, 2012, http://www.reuters.com/middle-class-infographic.

9World Business Council for Sustainable Development, “Exploring inclusive business solutions in emerging markets: Global Consumption Database launched by the World Bank Group,”
May 12, 2014, http://www.inclusive-business.org/2014/05/ifc-global-consumption-data.html.

10

Ben Perkins and Celine Fenech, “The Deloitte Consumer Review: The growing power of consumers,” 2014, http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consumerbusiness/consumer-review-8-the-growing-power-of-consumers.pdf.

11Hans Taparia and Pamela Koch, “A Seismic Shift in How People Eat,” New York Times, November 6, 2015, http://mobile.nytimes.com/2015/11/08/opinion/a-seismic-shift-in-howpeople-eat.html?smid=tw-nytopinion&smtyp=cur&_r=1&referer=https://t.co/Rb5av1GDsD.

12“The Deloitte Millennial Survey – Executive Summary,” Deloitte, 2015, http://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.html.

13

US SIF Foundation, “Report on US Sustainable, Responsible and Impact Investing Trends,” p. 15, 2015, http://www.ussif.org/files/publications/sif_trends_14.f.es.pdf

14

Green America, “Shareholder Activism,” http://www.greenamerica.org/socialinvesting/shareholderaction/whattoknow.cfm.

15

http://www.hbs.edu/faculty/Pages/item.aspx?num=41104

16

Edelman, “2015 Edelman Trust Barometer: Executive Summary,” 2015, http://www.edelman.com/insights/intellectual-property/2015-edelman-trust-barometer/
trust-and-innovation-edelman-trust-barometer/executive-summary/.

17

Patrick Kulp, “People lash out at FIFA sponsors for worker deaths during stadium construction,” Mashable, May 27, 2015, http://mashable.com/2015/05/27/
skewer-world-cup-sponsors/#Ni_W84feVSqk.

18

Daniel Runde, “M-Pesa And The Rise Of The Global Mobile Money Market,” Forbes, August 12, 2015, http://www.forbes.com/sites/
danielrunde/2015/08/12/m-pesa-and-the-rise-of-the-global-mobile-money-market/.

19

FabWiki, “Portal:Labs,” http://wiki.fablab.is/wiki/Portal:Labs.

20

Volans, Global Corporate Venturing, MacArthur Foundation, The Social Investment Business. “Investing in Breakthrough Corporate Venture Capital,” 2014, p. 10, http://www.
breakthroughcapitalism.com/files/volans-investing-breakthrough-report.pdf.

21

Yasemin Saltuk, Ali El Idrissi, Amit Bouri, Abhilash Mudaliar, and Hannah Schiff, “Eyes on the Horizon: The Impact Investor Survey,” J.P. Morgan, May 2015, http://www.thegiin.org/
assets/documents/pub/2015.04%20Eyes%20on%20the%20Horizon.pdf

22

BCorporation, “Corporation Legal Roadmap,” https://www.bcorporation.net/become-a-b-corp/how-to-become-a-b-corp/legal-roadmap/corporation-legal-roadmap.

23

Oliver Joy, “Ninety percent of Europeans want 2030 renewable energy target, EC poll shows,” The European Wing Energy Association Blog, March 6, 2014, http://www.ewea.org/
blog/2014/03/ninety-percent-europeans-want-2030-renewable-energy-target-ec-poll-shows/.

24

Debi Goenka, “Take it from us in India: the world needs renewables, not more Australian exported coal,” The Guardian, October 21, 2014, http://www.theguardian.com/
commentisfree/2014/oct/22/take-it-from-us-in-india-the-world-needs-renewables-not-more-australian-exported-coal.

25

U.S. Energy Information Administration, “China: International Energy Data and Analysis,” May 14, 2015, http://199.36.140.204/beta/international/analysis.cfm?iso=CHN.

26

Amanda Gardiner, interview with the authors, October 5, 2015.

27

Anna Muoio and Noah Flower, “The Rockefeller Foundation: A long term bet on scientific breakthrough,” part of “ENGAGE: How Funders Can Support and Leverage Networks forSocial Impact,” 2015, http://engage.rockefellerfoundation.org/story-sketch/rice-biotechnology-research-network/.

28

Markus Strangmueller, interview with the authors, October 28, 2015.

29

Kurt Dassel, Nate Wong and Joy Li, “The Humanitarian R&D Imperative,” World Humanitarian Summit, March 2015, https://www.worldhumanitariansummit.org/node/490549.

30

Volans, Global Corporate Venturing, MacArthur Foundation, The Social Investment Business. “Investing in Breakthrough Corporate Venture Capital,” 2014, p. 10, http://www.
breakthroughcapitalism.com/files/volans-investing-breakthrough-report.pdf.

31

Ibid.

32

JPMorgan Chase & Co., “Generating Positive Impact Alongside Financial Return,” 2015, http://www.jpmorganchase.com/corporate/Corporate-Responsibility/social-finance.htm.

License to innovate Breakthrough strategies for social impact 31

33

Pieter Wolters, interview with the authors, October 2, 2015.

34

Ibid.

35

Ibid.

36

Ibid.

37

Ibid.

38

Magarinos-Ruchat interview.

39

Toilet Board Coalition website, http://www.toiletboard.org/.

40

Ibid.

41

Etienne Butruille, interview with the authors, October 16, 2015.

42

World Wildlife Fund, “REPORT: Profitability and Sustainability in Palm Oil Production,” May 2, 2012, http://wwf.panda.org/?204548/
Profitability-and-Sustainability-in-Palm-Oil-Production/.

43

Cheryl Hicks, interview with the authors, November 13, 2015.

44

Martha Herrera, interview with the authors, October 26, 2015.

45

Monitor Deloitte. “Accelerating Impact: Exploring Best Practices, Challenges, and Innovations in Impact Enterprise Acceleration,” Rockefeller Foundation, February 2015, https://assets.
rockefellerfoundation.org/app/uploads/20150201214323/Accelerating-Impact.pdf.

46

Wolters interview.

47

Claus Stig Pedersen, interview with the authors, October 28, 2015.

48

IDEO website, 2015, https://www.ideo.com/about/.

49

MaRS, “What is MaRS EXCITE?,” 2015, https://www.marsdd.com/systems-change/mars-excite/.

50

Rosabeth Moss Kaner, Rakesh Khurana, Rajiv Lal, and Eric Baldwin, “PepsiCo, Performance with Purpose, Achieving the Right Global Balance,” Harvard Business School Case, October
2011 (Revised January 2012), http://www.hbs.edu/faculty/Pages/item.aspx?num=41104.

51

Mark Anthony Brown, “What Comes Out in the Wash,” http://www.nytimes.com/2015/11/29/opinion/sunday/what-comes-out-in-the-wash.html Nov 28, 201552

Dan Bena, interview with the authors, October 13, 2015.

53

Jennifer Reingold, “PepsiCo’s CEO was right. Now what?,” Fortune, June 5, 2015, http://fortune.com/2015/06/05/pepsico-ceo-indra-nooyi/.

54

Maarten Van Herpen, interview with the authors, October 9, 2015.

55

Ibid.

56

Ibid.

57

Ibid.

58

Shankar Venkateswaran, interview with the authors, October 14, 2015.

59

Sylvia Ann Hewlett, Melinda Marshall and Laura Sherbin, “How Diversity Can Drive Innovation,” Harvard Business Review, December 2013, https://hbr.org/2013/12/
how-diversity-can-drive-innovation.

60

Pedersen interview.

61

Graham Macmillan, interview with the authors, November 5, 2015.

62

Michael Fuerst, interview with the authors, October 21, 2015.

63

Bérangère Magarinos-Ruchat, interview with the authors, October 15, 2015.

64

Francisca Tondreau, interview with the authors, October 30, 2015.

65

Katie Smith Milway and Jeff Bradach, “Q&A With Desh Deshpande,” Stanford Social Innovation Review, November 6, 2015, http://ssir.org/articles/entry/qa_with_desh_desphande.

66

Thomas Andre, interview with the authors, October 12, 2015.

License to innovate Breakthrough strategies for social impact

32This publication is released in the name of Deloitte and the WBCSD. It is the result of a collaborative effort by the writers,company representatives, and experts in the area of social innovation. A wide range of individuals reviewed drafts, thereby
ensuring that the document broadly represents the perspective of both organizations. It does not mean, however, that every
company agrees with every word.

About the World Business Council for Sustainable Development
The World Business Council for Sustainable Development (WBCSD), a CEO-led organization of some 200 forward-thinking global
companies, is committed to galvanizing the global business community to create a sustainable future for business, society and theenvironment. Together with its members, the council applies its respected thought leadership and effective advocacy to generate
constructive solutions and take shared action. Leveraging its strong relationships with stakeholders as the leading advocate for business,the council helps drive debate and policy change in favor of sustainable development solutions.
The WBCSD provides a forum for its member companies - who represent all business sectors, all continents and a combined revenue ofmore than $7 trillion - to share best practices on sustainable development issues and to develop innovative tools that change the statusquo. The council also benefits from a network of 65+ national and regional business councils and partner organizations, a majority ofwhich are based in developing countries.
www.wbcsd.org

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