Social Innovation

Impact Investors Are Setting the Tone for Aligning With the SDGs

Posted on by Case Foundation

Earlier this fall we talked about the Sustainable Development Goals (SDGs)—a collective action agenda that offers a coordinated approach to ending global poverty. We were particularly inspired by the strong examples of SDGs providing a unifying framework for corporations to double-down on integrating impact. But corporations are not the only group of actors finding alignment across the SDGs. Some impact investors—a community that continues to grow in size and scope—are already there.

Since the SDGs were formalized in 2015, we’ve seen impact investors reframe their thinking across both measurement and the development of new products. And the data supports this with the latest Global Impact Investing Network (GIIN) Annual Survey reporting 26 percent of the investors surveyed already track performance of their investments to the SDGs. An additional 34 percent plan to do so in the future—this will represent more than half of the active respondents already engaged in Impact Investing. Of the respondents who participated, many cited easier communication of impact (78 percent) and alignment with global development structures (75 percent) as key strengths of using SDG-aligned language.

Advancements in Standards and Frameworks

Standardization around how we invest in—and measure—the SDGs will be critical to truly meeting the Goals. Establishing a coherent set of frameworks that guide investors on “how” will also help us speak the same language. This year alone we’ve seen a thoughtful emergence of some of these SDG-aligned frameworks. Many allow investors and companies to measure how their investments and enterprise activity contribute to “achieving” the SDGs. Different approaches to measuring and integrating the SDGs are a positive sign that they could become best practice around how the sector designs for impact:

  • SDG Compass developed by GRI, the UN Global Compact and the World Business Council for Sustainable Development (WBCSD) provides company-level guidance on measuring and managing the effect and contribution of companies toward the SDGs
  • Toniic—a global action community for impact investors – released a framework earlier this year to allow their investor community to align their investments with the SDGs. These framing facilitated better identification of synergies across global investment opportunities
  • The MSCI ACWI Sustainable Impact Index works across the public markets to consolidate the 17 Goals into five investible themes – basic needs, empowerment, climate change, natural capital and governance. The Index identifies companies that derive at least 50 percent of their revenue from products and services that address environmental and social challenges within these themes, and weights them accordingly.

Innovations in Products and Processes

Impact investors are also leading in other ways, experimenting with actual integration of the SDGs into their decision-making process. For these investors and managers, the SDGs offer guidelines on how they make decisions, the investments they select, the companies they support and how to measure that impact:

  • Encourage Capital, an emerging market-based private equity fund manager has identified five impact objectives all closely aligned with the SGDs—financial inclusion, climate change, sustainable infrastructure, sustainable seafood and water conservation. According to a GIIN Report on the SDGs, Encourage uses the SDGs to “ground the impact outcomes that might be more difficult to conceptualize.”
  • Sonen Capital, a multi-strategy impact investing manager framed its 2015 Annual Report around how its investment strategies link to the SDGs. According to the firm, the SDGS could be good for business, serving as a “compass” to ensure investments can be measured in their contribution to the Goals.
  • PGGM, the second largest pension fund in the Netherlands, modified their investment strategy to include “Sustainable Development Investments (SDIs)”. These investments must fulfill regular risk return requirements, while providing a substantial and measurable contribution to one or more SDGs. Aligning across six of the SDGs, PGGM focuses on climate change mitigation, water, food, and health.

The above are only a handful of the innovative experiments and commitments on the part of impact investors to make the SDGs a part of how we invest and what we measure.

To truly end global poverty and achieve the Goals, we’ll need many different folks around the table. Creating a common language for all actors is critical and we should continue to commit to learning from those who are experimenting. We hope that the development of measurement frameworks, investment products and ecosystem building will only increase over time. To facilitate doing that the right way, creating synergy across how we talk about the Goals will take us one step closer to effectively channeling capital to solve our most pressing challenges.

With thanks to Mai Nguyen (Social Innovation Intern at the Case Foundation) for her support in researching this piece.  

5 Quotes To Inspire You To #BeFearless

Posted on by Case Foundation

Make big bets and make history. Experiment early and often. Make failure matter. Reach beyond your bubble. Let urgency conquer fear. These are the five Be Fearless principles that serve as the common thread for groundbreaking, problem-solving success. Nonprofits, philanthropy, individuals, startups and corporations have leveraged these principles to bring forward world changing inventions, to shift our mindsets of what’s possible and to solve persistent social problems.

Our CEO, Jean Case, explained what the principles mean in our initial Be Fearless episode on Facebook Watch. Storytelling is not only a way to bring to life the historical and contemporary Be Fearless champions who have changed the world, but also a way to lift up those undiscovered fearless changemakers that inspire you. Through our Finding Fearless campaign, we’ve heard from people around the world with examples of a wide variety of people and organizations putting the Be Fearless principles into action. The stories we receive will have a chance of being featured in Jean Case’s upcoming book or uplifted by the Case Foundation in our work and we continue to review stories posted on the site on a daily basis.

But stories don’t always need to be long to be impactful. We have seen a single quote inspire changemakers to move to action, to overcome their fears and take the steps needed to start them on the path of transformational change. To inspire you and to remind you of those inspired by #BeFearless, here are some of these quotes.

On making big bets

On experimenting
 

On failure

On reaching beyond your bubble
 

On urgency
 

We hope these words of wisdom from changemakers of all backgrounds and perspectives inspire you to take a fearless approach to your own work. And we hope they inspire you to share a story, whether it’s your own or a story you love. If you’re looking for even more Be Fearless inspiration, check out our show on Facebook Watch, head to our Be Fearless hub, and tweet at us using #FindingFearless.

Are the SDGs the North Star for Corporations?

Posted on by Case Foundation

Each September, delegations of public and private sector representatives from almost every country meet at the UN General Assembly (UNGA) to discuss how best to work together to solve the world’s most endemic political, economic and security challenges. On the development front, a framework called the Sustainable Development Goals (SDGs) serves as a collective action agenda, with progress measured against 17 primary goals and 169 targets covering a broad range of issues inclusive of poverty, health, education, hunger, women and girls, city sustainability, climate change and others. Experts estimate that it will take approximately $2 trillion a year—through the expiration date of 2030—to finance the goals. That’s a total need of about $26 trillion. If we can find a way to fund the Goals, we have the potential to end global poverty and hunger, protect the planet from degradation, ensure human beings can enjoy fulfilling lives, and foster peaceful and inclusive societies.

This means we have a lot of work to do. For years, SDG organizers and activists have pushed the private sector to play a more robust role in developing and delivering on the framework. And many corporations have stepped up to the plate in the process, even aligning their own activity with the Goals.

Recent rhetoric around “urgency” and “need” and “responsibility” on the part of private actors has been deafening. For many of these organizations, focusing on the Goals is synonymous with understanding what their company’s future might look like. In a world of increasingly scarce resources, rapid automation, global climate shifts and growing power of a socially conscious customer-base, sitting on the sidelines may mean getting left behind. The imperative to pursue these global mandates can either be to mitigate risk or to truly appreciate the value of profit and purpose. Regardless, the zeal with which corporate leaders and institutions are reaching for the baton feels unprecedented.

Conversations during UNGA week were abuzz with one key question—how can the private sector approach the SDGs in a way that actually achieves our shared global objectives? In response to this, the Global Impact Investing Network, in partnership with The Abraaj Group and Bank of America Merrill Lynch, convened business leaders to discuss what they’ve been doing to meet this goal and what more will be needed.

Inspired by the enthusiasm of the participants—and the ambitious thinking of changemakers in the room, here were some things we heard:

First, we have to start talking about the SDGs as a framework, not a silver bullet.

It was inspiring to hear representatives from Safaricom, Royal Phillips, and LADOL broadly agree that the SDGs create a construct for real conversation. Specifically, the Goals offer an organized way of aligning business activities with delivering impact. The segmentation of goals—and even more importantly, their targets—help businesses understand which of their peers are tackling the same problems and encourage collaboration towards these ends. In our own Impact Investing work, specifically through the Impact Investing Network Map, we’ve seen firsthand that there’s real value in understanding who’s playing in your space. By identifying likely allies, organizations are motivated to work together to achieve better results.

Second, the private sector must be the nexus for change, not an afterthought.

Capital and investment have often powered the wheel of innovation, for better or worse. As our panelists pointed out, businesses are not just a key stakeholder in systems-wide change, but a key organizer. Particularly in emerging markets, they are required to work with local communities, align different sources of capital, and inspire local government to serve the immediate needs of their own supply chain. That’s a unique position to be in. Take healthcare, for example. To revolutionize the healthcare system in emerging markets, as was explained from the mainstage, the solution is not as simple as building one hospital. Businesses need to create relationships with pharmaceutical companies, train doctors and nurses and even improve local transport and infrastructure to facilitate effective treatment. As representatives of Abraaj’s Growth Markets Health Fund, Royal Phillips, PBUCC and the IFC made clear (through their partnership in the Growth Markets Health Fund), even the most catalytic investments or innovative solutions need everyone around the table.

Third, without refreshed norms on how the private sector operates, progress will be stunted.

Even with the best collaboration and innovation, how we measure success needs an update if the goal is to maximize impact alongside profit. And that requires a move from short term wins to long term sustainability. As Amy Jadesimi pointed out from the stage, we’ve allowed the industry to drift dangerously away from what “long term” used to mean in the 70s and 80s. Corporate trailblazers—like Paul Polman of Unilever—continue to urge businesses to rethink how they measure success and with what frequency. But many agree that to do this, we need to first educate those calling the shots, and that extends beyond the C-Suite. Shareholders need to be informed of the value of sustainable thinking and long-term planning. They need to be encouraged to use their voice and to exercise their votes in alignment with what they believe to be fundamental to the success of a company long-term. Financial managers need to be at the helm of product innovation, exploring new mechanisms that leverage both social and financial returns. Stakeholders—every entity or individual affected by a businesses’ core activity—must be engaged holistically. Even across private assets, there’s a role for Limited Partners to play with General Partners and fund managers to actively demand that they work with their portfolio companies to think beyond just the bottom line—for financial and social benefits.

Achieving the SDGs are more of a reality today than ever before. They are integral to the well-being of hundreds of millions of people around the world. Some corporations are ready to move to fulfill this mandate, while others are waiting to be inspired. If we can use the framework of the SDGs to usher in this new way of thinking, acting and partnering—with the private sector as an integral and active participant—we may truly have an opportunity to massively reduce global poverty.

Looking for Fearless

Posted on by Case Foundation

This fall, I will be tackling a new endeavor: writing a book about the Be Fearless principles that will feature remarkable stories of fearless people and organizations that embody them. The book will be grounded in five principles that together represent keys to creating the “secret sauce” that can bring about transformational change. Being fearless means setting audacious goals, acting urgently and boldly. It means experimenting, taking risks, being willing to strike unlikely alliances and accepting the possibility of failure while still pressing forward.

Since launching our Be Fearless work at the Case Foundation, we’ve highlighted and written about many wonderful stories of fearlessness—those inspiring people and organizations that started with a big bet, took risks, built unlikely partnerships, remained undaunted in the face of failure and used urgency to help conquer fear. These stories run the gamut from those more familiar—from President Kennedy’s moonshot, to two-time Nobel Prize winner Marie Curie’s pioneering work on radioactivity, to modern day Elon Musk—to lesser known contemporary tales of remarkable people and organizations who are doing remarkable things. Many of these are highlighted on the Be Fearless website and featured on social media through events like #FearlessFriday.

We live in a time when the world demands we build innovative, new approaches. And we know there are stories of fearlessness playing out across America and around the world every day. We know that there are many individuals who have lived the principles of Be Fearless through time, but whose stories may not be known. Their stories run the gamut: from business owners to nonprofits leaders, from those trying to make a difference in their communities to those launching a startup. These are the people and organizations who have brought us unique inventions, great discoveries and impacted the lives of others, and they have done so fearlessly.

And that’s where you come in.

We want to learn about these stories so we can highlight their successes, the challenges they overcame and their Be Fearless thinking to both raise the profile of their stories and to provide compelling role models for those who will follow in their footsteps. No matter the focus, no matter the scale, no matter when or where they lived, if you have a compelling story about an individual or an organization that you think embodies the five Be Fearless principles, we want to hear it.

To make it easy to submit the story you want us to know about, we’ve created a simple template that you can find at FindingFearless.org. There, you can post short descriptions of what inspires you—whether it’s from your own journey or that of another individual, nonprofit, corporation or startup—and how they put Be Fearless to work. We have a team of researchers prepared to dig deeper, should we select the story to be highlighted in my book or to lift up through the Case Foundation.

I have no doubt that our Be Fearless work at the Case Foundation and the stories I will highlight in my book will be made better through the contributions of others. I invite you to join us on this exciting Finding Fearless journey.

To Get Past our Blind Spots, We Need to Be Fearless

Posted on by Case Foundation

At the Case Foundation, we are excited about a new book that’s hitting the stands this week: The Innovation Blind Spot, written by my friend, and long-time Case Foundation partner, Ross Baird. True to its title, the book portrays the current state of entrepreneurship, investment and innovation in the United States today, and does so through a prism of “blind spots” that currently inhibit growth and opportunity. But rather than simply laying out the challenges, Ross lays out a “playbook” of how to overcome these blind spots.

The book kicks off with some pretty worrying statistics. While entrepreneurship is—and always has been—at the core of our DNA in America, and many believe it is what sets us apart as a nation, it turns out that entrepreneurial activity is actually at 40-year low in the US—more businesses are dying each day than starting.

Sure, there are sectors that are thriving in our “innovation nation”—particularly big companies, elites on the coasts and those who have historically had access to capital and networks. At the same time, others across the country are literally being left behind in the innovation economy—particularly women, people of color, those in the middle of the country, and those who come from less familiar places and backgrounds. Indeed, the data makes this clear: Less than 10 percent of venture capital goes to women; less than 1 percent to African American founders. An overwhelmingly disproportionate share goes to a limited few: last year a whopping 75 percent of all venture capital went to just three states—California, New York and Massachusetts and 10 percent of all startup financing went to graduates from just six universities. Ross, who has joined every one of my husband Steve Case’s Rise of the Rest road trips, intimately understands the hurdles this poses for innovators who come from diverse backgrounds. Indeed, the Innovation Blind Spot in many respects seems almost like a companion to books like Adam Grant’s Originals or The Third Wave, authored by Steve in 2015.

As all of these books make clear, great innovations come from unexpected people and places, and we need to go the extra mile to identify and support them. “The simple truth,” Ross says, “is that the current model for venture capital—for backing new ideas—is bad for all founders who don’t fit the pattern. It’s bad for investors, too, because the biggest venture capital firms, concentrated in the biggest cities, aren’t necessarily set up to invest in the most innovative ideas.”

The first step in overcoming this blind spot? Understand that every investment decision has bias: embrace and mitigate it, Ross says. People invest in and support people they know and understand. The Innovation Blind Spot goes into enlightening detail on how cognitive bias, not the quality of idea, affects whether someone gets funding.

Add to this, the blind spot that Ross calls “two pocket thinking”: how we artificially separate our jobs and our careers from our values. Walking through the modern history of business, philanthropy and investing, Ross challenges the traditional idea that business and investing need to be separate from the interest of building a better world. “If we live in a two-pocket world, where business has no responsibility for what happens in society, we’re fighting a losing battle,” says Ross. While we’ve had 100 years of “make your money, then give it away” as the way things have been done, Ross provides a compelling mix of data and storytelling that challenges this approach, and lays out ideas for how best to spotlight cities and companies on the rise and to blend business, social good and investing, much as he has done through his own venture capital firm, Village Capital.

I encourage you to pick up a copy of The Innovation Blind Spot today, and more importantly, I encourage you to be fearless with the ideas you look for, support, and invest in.

*Disclosure: Jean and Steve Case are investors in Village Capital.

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