Profitable Social Impact: Encouraging Sustainable Growth In Your Region

Sustainable. Responsible. Social impact. Businesses that seek to do some good in the world on top of making a profit are referred to by a lot of names. But they all share an optimistic view of private enterprise’s ability to make a difference. And while they take different avenues to reach their goals, more and more companies around the globe are finding new ways to clean up the environment, improve the lives of their employees, reduce inequality, and much more.

In the following article, we’ll take a quick peek at some of the trends driving the social impact economy today, as well as three categories of social impact companies leaving a positive mark on the world that we think are especially important.

Social Impact Company Trends

When we did our research, two trends in the social impact economy jumped out at us. The first was the increasing ubiquity of corporate social responsibility language and behavior exhibited by all sorts of companies around the world. The second was the huge amounts of capital and investment flowing into firms that can fairly be described as social impact companies.

Widespread commitment to corporate social responsibility

Regardless of which region, sector, or industry you look at, it’s pretty clear that companies are increasingly focused on recording – and reporting – metrics related to corporate social responsibility.

Growth in Global CSR Reporting Rates
Source: https://www.researchgate.net/figure/Growth-in-global-CSR-reporting-rates-KPMG-2017-and-authors_fig5_333657703

This means that even companies which aren’t traditionally known for operating with an emphasis on pro-social impact are increasingly becoming involved in socially impactful initiatives and movements.

It’s becoming gradually more common to see firms of all sizes shifting their focus to include socially responsible goals.

Increased access to capital

The capital flowing into social impact companies, regardless of the industry or sector they find themselves in, is growing by leaps and bounds. While companies in financial services and microfinance remain favorites of impact investors, other industries, including energy, housing, and agriculture, are feeling the effect of the increasing enthusiasm of investors to put their money into companies that put people before profits.

This graph from 2018 shows a nearly 5-fold increase in the impact investing assets under management since 2014.

Impact Investing Assets Under Management by Investment Sector
Source: https://www.mckinsey.com/industries/private-equity-and-principal-investors/our-insights/catalyzing-the-growth-of-the-impact-economy

Different Ways to Make an Impact

Social impact companies aren’t all cut from the same cloth. They have different focuses and goals, come from different industries, and use various strategies to achieve their ends. At Gazelle.ai, we follow at least three categories of companies that we find particularly interesting: United Nations Global Compact firms, certified “B” corporations, and SBA 8(a) certified companies.

United Nations Global Compact

Billing itself as “the world’s largest corporate sustainability initiative,” The United Nations Global Compact accredits companies around the planet that demonstrate a commitment to its “Ten Principles.” Member companies benefit from access to partnerships with a wide range of members and sponsors, as well as best practice guidance built over the last two decades. The UNGC also provides tools, resources, and training to member company leaders and employees.

Sustainable Development Goals

At the core of the UNGC’s mandate is the advancement of 17 Sustainable Development Goals. From the elimination of poverty and hunger to the protection of clean water and the creation of rewarding jobs and economic growth, the Goals help focus the efforts of member companies.

17 Goals to Transform our World
Source: https://www.un.org/sustainabledevelopment/blog/2015/12/sustainable-development-goals-kick-off-with-start-of-new-year/

The Members

Signatories and participants in the United Nations Global Compact program run the gamut from large chemical companies like Hexion to small- and medium-sized enterprises like the twelveNYC agency. They come from all over the world and, depending on their industry, tend to focus on different areas of the UNGC’s mandate.

And if you’d like to see more about the companies participating in the UNGC, request a free trial to access this list.

United Nations Global Compact Signatory At-a-Glance: Denominator

As one of the newest signatories to the UNGC, Denominator is a data-driven company with a small footprint and big ambitions. It focuses on diversity, equity, and inclusion (DEI) metrics, offering transparent data and insights into the DEI performance of millions of companies in over 200 countries.

Denominator ranks public and private companies on their performance in over 175 meaningful DEI variables, from education-related metrics to firms’ treatment of employees with disabilities.

Certified B Corporations

Certified B Corporations balance their pursuit of profit with a steadfast commitment to socially positive goals. Legally required to consider the impact of their decisions on their workers, suppliers, customers, environment, and community, “B-Corps” are world leaders in the improvement of the markets and communities they serve.

The number of businesses certified as B-Corps continues to grow rapidly, with particularly impressive advances in Europe.

Growth of European B Corp Community 2010-2020
Source: https://bcorporation.eu/update-b-corp-certification-fees

B-Corp At-a-Glance: Flow Water Inc.

Based in Ontario, Canada, Flow Water is North America’s first social water brand. It’s dedicated to providing high-quality drinking water without the environmental impact of traditional bottled water brands. The company sells its water in recycled TetraPak cartons.

And while it’s already a leader in combining profitability with positive social change, Flow Water aims to achieve a range of ambitious sustainability goals in the near future. It’s committed to achieving 100% reusable, plant-based packaging by 2030 and being carbon-negative by 2025.

Want to see some other notable B-Corps? Request a free trial to access the list here.

SBA(8)a Certified Businesses

Certifying companies that are at least 51% owned by a socially- or economically-disadvantaged US citizen, the Small Business Administration (8)a Business Development Program aims to level the playing field for small business owners in the United States.

The program offers qualifying participants a chance to compete for set-aside and sole-source government contracts, access to a Business Opportunity Specialist to assist with federal contracting, and regular management and technical assistance from mentors around the country.

And if you’d like to check out Gazelle’s list of SBA(8)a certified companies, request access here.

Why It Matters

If you’re wondering why the dramatic growth of the social impact economy should matter to EDOs, we’ve got two answers for you. First, the energetic expansion in this sector proves that corporate social responsibility makes money. Companies that care about more than short-term profits and focus on the long-term sustainability of their businesses attract a lot of investment, grow quickly, and employ a lot of people. This is great for the communities in which they do business.

Just as importantly, social impact companies go the extra mile to beautifying and enhancing the cities and towns they live in. Beyond just job creation, these companies often take good care of natural resources, enhance educational opportunities, and maintain the health of their people. All of these benefits have positive impacts on the places these firms call home.

Keep in touch

Sign up for the Gazelle Gazette

SUBSCRIBE TO
OUR NEWSLETTER

416 De Maisonneuve Blvd West, Suite 1000,
Montreal, Qc, H3A 1L2