building public benefit and shared value into business

Building public benefit and shared value into business:Models in Canada and around the world

Net Impact: GreenEdge 2011 ConferenceYork University, Schulich School of Business

Summary

• Motivation• Case Studies

o Affordable Housing Modelso Local Modelso Global Models

• Looking Ahead

Motivation

We are faced with seemingly intractable social and

environmental problems at a global and local level.

1. Poverty2. Climate change

3. Government debt4. Economic transition

Our Challenges:

Sandy Lake First Nation 2008

Kenya 2009

Ottawa 2009

Windsor 2010

The Cost:

Billions & trillions of dollars.

Hundreds of thousands of lives.

We have a fundamental responsibility to act. We

need to change the way we live and

the way we do business.

An agenda driven by:

ConsumersThought LeadersPolitical Leaders

InvestorsVentures

Professor Michael PorterBishop William Lawrence University Professor at Harvard Business School

“In recent years business increasingly has been viewed as a major cause of social, environmental,

and economic problems. Companies are widely perceived to be prospering at the expense of the

broader community...The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value

for society by addressing its needs and challenges…The purpose of the corporation must

be redefined as creating shared value, not just profit per se. This will drive the next wave of

innovation and productivity growth in the global economy.

”The concept of shared value recognizes that societal needs, not just conventional economic needs, define markets. It also recognizes that social harms or weaknesses frequently create internal costs for firms—such as wasted energy or raw materials, costly accidents, and the need for remedial training to compensate for inadequacies in education. And addressing societal harms and constraints does not necessarily raise costs for firms, because they can innovate through using new technologies, operating methods, and management approaches—and as a result, increase their productivity and expand their markets.

Market Potential

Local: $30B

HNWIs: $120B

Global: $400B - $1T

Case Studies

Case Studies in Affordable Housing

New York City Acquisition Fund• Goal: support the development of 30,000 low

income housing units in New York City to address housing shortage

• Target: for-profit and non-profit affordable housing developers to refurbish or build units

• Fund size: ~$200 million

Serviam Gardens: $3.6 million loan an 83-unit complex for low-income seniors in the Bronx via NYC Acquisition Fund.

Regent Park Revitalization: Public benefit financing and enterprise focus

Social Hiring:SCP & Active Green & Ross

Partnership Model: Local

Social Venture Exchange (SVX)A local, impact-first market connecting social ventures, impact funds, and impact investors in order to catalyze new investment capital geared towards improved social and environmental outcomes.

• Public benefit partnership led by Social Innovation Generation (SiG) at MaRS and the TMX Group Inc. with the support of the Government of Ontario

• Focus on debt and equity offerings for non-profit and for-profit ventures reducing poverty, increasing opportunity and enhancing sustainability (affordable housing providers to solar power firms)

• private online market platform with venture listings, fund listings, a resource centre, investor collaboration tools, and a service provider listing modeled on private markets in the US and other evolving impact market platforms

Social Purpose Business:Turnaround Couriers

Global Innovation Model

Partnership Model: Global

Mission: to bring health through food to the largest number of people in Bangladesh

INVESTMENTREINVESTMENT

RETURN/REFUND LOCAL DEVELOP.Value: Combating malnutrition through the sale of a low cost yogurt cup.

Base of the Pyramid(BoP) Model

Finestrella: Regional mobile phone company focused on low-income customers.

Challenges

• Skeptics• Getting the business model right: hiring and

training, authenticity, fit• Entire mission vs. focused brand• Balance: Investor demands, profitability and

patient capital• Philosophical: basic service delivery by

government or private sector• Impact measurement

Looking Ahead

LegislationSector agnostic start-upsCorporate social innovation

Significant growth

Thank You

Net Impact: GreenEdge 2011 ConferenceYork University, Schulich School of Business