Modernizing corporate social investment
By: Devaprakash Ramakrishnan
Tags: Csr, Corporate Philanthropy, Sustainable Development, Impact, Private Sector

Featured image courtesy: Riccardo Annandale

Despite the private sector holding 90% of global job prospects, enduring inequities compounded by gender disparities in labor and enterprise markets persist. Mainstreaming sustainable development calls for new norms in corporate social investment which cannot continue in its present format of service delivery-based grants-heavy paradigm. The new avatar must reinvent far beyond the traditional corporate philanthropy and the CSR models.

While the SDG action envisages social change in the spheres of workplace, marketplace, and community surrounding businesses by balancing people, planet, and profit, calling for a mere 1% of global wealth of $ 317 trillion in 2018 as reported by Credit Suisse; yet unlocking requires $ 2.5 to 3 trillion in absolute terms presenting herculean task, demanding heart and soul engagement of private sector.

The contemporary private sector development models carry the inherent limitation of scale with the inability to address systemic causes and structural barriers leaving impact gaps. There is a compelling need to build bridges between sectors that are quite non-traditional through shared value partnerships with arrangements of a commercial or semi-corporate nature including investment funds and social impact businesses.

Impact investment, results-based financing like Development Impact Bonds (DIB) and SIB, social enterprise model, microfinance route, blended finance format, tapered down approach, social investment in supply chains are emerging business models holding promise for transforming development through innovative and dynamic partnerships in order to gain scale and impact and move forward on the goal towards achieving of SDGs and specifically on Goal 1,2, 5, 8,9,10, 11,12, 15 and 17 with Goal 5 having an overarching role on all 17 SDG Goals.

Self-assessment trackers like Poverty footprint tool, Women’s Empowerment Principles (WEPs) gap analysis tool, and SDG compass, publicly reporting tools like UN guiding principles for business and human rights, standards and policies on carbon, full Environment, Social and Governance (ESG) reporting and compliance tools like buyers code of conduct and labor policy, OECD guidelines for multinationals and IFS’s performance standards hold huge promise for monitoring the progress on SDGs by companies which will benefit companies’ own stakeholders and shareholders as the majority of impact investors are profit-conscious expecting market returns while achieving purpose.

The private sector would be best positioned to champion this transformational development with a promise to edge-out grants through gamification of the corporate social investment with non-traditional financing tools, and innovative development models (Revitalizing the global partnership for sustainable development as part of SDG 17) and holding themselves accountable through self-assessment, public reporting, meeting compliance and established norms. Yet the pathways to modernize corporate social investment are not rosy with a mind shift needed across the spectrum of the business value chain from milestone-based deliverables to outcome-focussed results embracing accountability and commitment from all stakeholders.

More detailed version: https://medium.com/@devaprakash.ramakrishnan/modernizing-corporate-social-investment-cf445068ee14