MANAGEMENT FOR SUSTAINABILITY
AND IMPACT
INHOUDSOPGAVE
0. Introduction .................................................................................................................................... 5
1. The fundamental of the impact-driven economy............................................................................... 5
1.1 Introduction to sustainability, purpose and impact ................................................................................. 5
Business world .................................................................................................................................................. 5
Drivers of transformation: impact at the centre of the stage .......................................................................... 7
Purpose? ......................................................................................................................................................... 13
The impact (Deep purpose) Triad ................................................................................................................... 13
Taking sustainability to the next level ............................................................................................................ 15
Overcoming the profit-impact lock-in ............................................................................................................ 15
Shallow matrics: demystifying esg ................................................................................................................. 15
Sustainability and impact maturity cycle........................................................................................................ 16
New corporations and entrepreneurial models ............................................................................................. 17
New innovation models .................................................................................................................................. 17
Sustainability fincance spectrum .................................................................................................................... 17
1.2 Societal challenges and purpose-driven economy........................................................................................ 18
The social impact revolution .......................................................................................................................... 18
1.3 Sources and consequences of inequalities and exclusion ....................................................................... 19
Unintended consequences of innovation ...................................................................................................... 19
Innovation in real places – Dan Breznitz ........................................................................................................ 20
New innovation models .................................................................................................................................. 20
Google story.................................................................................................................................................... 20
Case study 1: San Francisco ................................................................................................................................ 21
1.4 Theoretical foundations of impact-driven economy............................................................................... 23
A. The neo-classical economics’ basic assumptions ............................................................................... 23
B. The neo-classical economics first (internal) criticism ......................................................................... 24
C. Theoretical foundations of purpose-driven economy ....................................................................... 27
1.5 Theoretical foundations of purpose-driven economy: the new paradigms (sharing, circular and inclusive
economy) ............................................................................................................................................................ 33
Sharing economy ............................................................................................................................................ 33
Circular economy ............................................................................................................................................ 37
Inclusive economy .......................................................................................................................................... 39
Social innovation............................................................................................................................................. 44
Guest lecture – Opendot (02/10) ........................................................................................................................ 48
Guest lecture – The Human Safety Net (03/10).................................................................................................. 50
2 The entrepreneurial dimension of impact........................................................................................... 52
2.1 Hybridity spectrum: profit with purpose, CSR, shared value ........................................................................ 52
The spectrum of hybridity .............................................................................................................................. 52
1
, Profit with purpose and corporate social responsibility (CSR) ....................................................................... 57
From strategic CSR to the concept of shared value ....................................................................................... 61
Case study 2: Patagonia ..................................................................................................................................... 64
2.2 Hybridity spectrum: profit for purpose and social venture..................................................................... 66
2.3 Legal forms of hybrid organizations (Fabio Gallo Perozzi) ........................................................................... 72
1 Charitable and philanthropic organizations ................................................................................................ 73
2 Not-for-profit organization .......................................................................................................................... 73
3 Social Ventures ............................................................................................................................................ 74
4 Profit-for-purpose ........................................................................................................................................ 77
5 Profit with purpose ...................................................................................................................................... 79
6 Traditional for profit .................................................................................................................................... 80
Why hybridity? The ESG regulatory framework ............................................................................................. 80
2.4 Stakeholder engagement, analysis and double materiality ......................................................................... 81
A. Stakeholders analysis ................................................................................................................................. 81
B. Materiality analysis ..................................................................................................................................... 85
C. Double materiality analysis ........................................................................................................................ 86
D. The Sustainability Report ........................................................................................................................... 88
2.5 Impact management and measurement ...................................................................................................... 90
The impact revolution .................................................................................................................................... 90
The concept of social impact .......................................................................................................................... 92
Three key features of social impact: the Impact Triad ................................................................................... 93
The challenges of identifying the generated Impact ...................................................................................... 93
Impact management and measurement ........................................................................................................ 95
Towards impact: standards and frameworks ................................................................................................. 97
Sustainability and impact management and measurement process ........................................................... 101
Case study 3: Konica Minolta............................................................................................................................ 103
2.6 Impact venture strategy: business models ................................................................................................. 107
Social ventures’ business models ................................................................................................................. 107
Corporate impact finance for social venture................................................................................................ 116
Social venture ............................................................................................................................................... 118
Future perspectives: the SocialTech venture ............................................................................................... 118
Guest lecture – Bolton (14/11) ......................................................................................................................... 119
2.7 Impact venture scaling strategies............................................................................................................... 124
Hybrid ideal ................................................................................................................................................... 124
Scale GROWTH......................................................................................................................................... 124
SV’s scaling and growth ................................................................................................................................ 125
Taxonomies for scaling ................................................................................................................................. 126
Case study 4: Embrace ...................................................................................................................................... 135
1. Is the Embrace infant warmer a business opportunity or social philanthropy? ...................................... 135
2. What strategies would you put in place to ensure the economic sustainability of the model (not
repeating the current subsidization strategy from the US with the 1:1 model)? ........................................ 135
Is Embrace’s business model scalable to serve the Indian market? ............................................................ 136
4. In case of scalability across other countries, Which country would you choose to start from and why?
Would you involve additional local / international actors in your scaling strategy in the local market? If yes,
which ones, of what nature (public, private, ngos…) and why? .................................................................. 136
2.8 Social-tech innovation ................................................................................................................................ 137
A broader picture.......................................................................................................................................... 137
Are purpose and profits positively or negatively related? ........................................................................... 137
Managing the profit purpose trade-off through innovation ................................................................... 139
“Future-incompatible “features of technology and innovation ................................................................... 140
SO, what do we do? ...................................................................................................................................... 142
2
, Where to learn from? ................................................................................................................................... 143
Social tech innovation................................................................................................................................... 143
3 Finance for sustainability ................................................................................................................. 145
1.1 Finance for impact ................................................................................................................................ 145
Reasons of new financial models for sustainable development .................................................................. 145
Trends on financial markets ......................................................................................................................... 147
The emergence of new models of participative finance .............................................................................. 148
Guest lecture – Three Hills (04/12) ................................................................................................................... 156
Our firm ........................................................................................................................................................ 156
Our impact … ................................................................................................................................................ 157
Guest lecture – Banca Sella (05/12) ................................................................................................................. 157
Who we are and what we (intentionally) do ................................................................................................ 157
Impact manifesto .......................................................................................................................................... 158
How to change? ............................................................................................................................................ 158
The innovators’ approach: no compromises ................................................................................................ 158
(De)risking through innovation..................................................................................................................... 158
Our intention of impact ................................................................................................................................ 158
“Make an impact” plan ................................................................................................................................. 159
Closing remarks ............................................................................................................................................ 159
3.2 Finance for impact: instruments ................................................................................................................. 160
Alternative Finance ....................................................................................................................................... 160
Responsible finance ...................................................................................................................................... 162
Sustainable investing .................................................................................................................................... 163
Microfinance ................................................................................................................................................. 164
Impact investing ........................................................................................................................................... 165
3.3 Public-private partnerships for impact ....................................................................................................... 170
Why PPPs and social impact? ....................................................................................................................... 170
PPPs evolution and case studies................................................................................................................... 172
The role of social impact measurement (SIM) in PPPs ................................................................................. 179
3
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AND IMPACT
INHOUDSOPGAVE
0. Introduction .................................................................................................................................... 5
1. The fundamental of the impact-driven economy............................................................................... 5
1.1 Introduction to sustainability, purpose and impact ................................................................................. 5
Business world .................................................................................................................................................. 5
Drivers of transformation: impact at the centre of the stage .......................................................................... 7
Purpose? ......................................................................................................................................................... 13
The impact (Deep purpose) Triad ................................................................................................................... 13
Taking sustainability to the next level ............................................................................................................ 15
Overcoming the profit-impact lock-in ............................................................................................................ 15
Shallow matrics: demystifying esg ................................................................................................................. 15
Sustainability and impact maturity cycle........................................................................................................ 16
New corporations and entrepreneurial models ............................................................................................. 17
New innovation models .................................................................................................................................. 17
Sustainability fincance spectrum .................................................................................................................... 17
1.2 Societal challenges and purpose-driven economy........................................................................................ 18
The social impact revolution .......................................................................................................................... 18
1.3 Sources and consequences of inequalities and exclusion ....................................................................... 19
Unintended consequences of innovation ...................................................................................................... 19
Innovation in real places – Dan Breznitz ........................................................................................................ 20
New innovation models .................................................................................................................................. 20
Google story.................................................................................................................................................... 20
Case study 1: San Francisco ................................................................................................................................ 21
1.4 Theoretical foundations of impact-driven economy............................................................................... 23
A. The neo-classical economics’ basic assumptions ............................................................................... 23
B. The neo-classical economics first (internal) criticism ......................................................................... 24
C. Theoretical foundations of purpose-driven economy ....................................................................... 27
1.5 Theoretical foundations of purpose-driven economy: the new paradigms (sharing, circular and inclusive
economy) ............................................................................................................................................................ 33
Sharing economy ............................................................................................................................................ 33
Circular economy ............................................................................................................................................ 37
Inclusive economy .......................................................................................................................................... 39
Social innovation............................................................................................................................................. 44
Guest lecture – Opendot (02/10) ........................................................................................................................ 48
Guest lecture – The Human Safety Net (03/10).................................................................................................. 50
2 The entrepreneurial dimension of impact........................................................................................... 52
2.1 Hybridity spectrum: profit with purpose, CSR, shared value ........................................................................ 52
The spectrum of hybridity .............................................................................................................................. 52
1
, Profit with purpose and corporate social responsibility (CSR) ....................................................................... 57
From strategic CSR to the concept of shared value ....................................................................................... 61
Case study 2: Patagonia ..................................................................................................................................... 64
2.2 Hybridity spectrum: profit for purpose and social venture..................................................................... 66
2.3 Legal forms of hybrid organizations (Fabio Gallo Perozzi) ........................................................................... 72
1 Charitable and philanthropic organizations ................................................................................................ 73
2 Not-for-profit organization .......................................................................................................................... 73
3 Social Ventures ............................................................................................................................................ 74
4 Profit-for-purpose ........................................................................................................................................ 77
5 Profit with purpose ...................................................................................................................................... 79
6 Traditional for profit .................................................................................................................................... 80
Why hybridity? The ESG regulatory framework ............................................................................................. 80
2.4 Stakeholder engagement, analysis and double materiality ......................................................................... 81
A. Stakeholders analysis ................................................................................................................................. 81
B. Materiality analysis ..................................................................................................................................... 85
C. Double materiality analysis ........................................................................................................................ 86
D. The Sustainability Report ........................................................................................................................... 88
2.5 Impact management and measurement ...................................................................................................... 90
The impact revolution .................................................................................................................................... 90
The concept of social impact .......................................................................................................................... 92
Three key features of social impact: the Impact Triad ................................................................................... 93
The challenges of identifying the generated Impact ...................................................................................... 93
Impact management and measurement ........................................................................................................ 95
Towards impact: standards and frameworks ................................................................................................. 97
Sustainability and impact management and measurement process ........................................................... 101
Case study 3: Konica Minolta............................................................................................................................ 103
2.6 Impact venture strategy: business models ................................................................................................. 107
Social ventures’ business models ................................................................................................................. 107
Corporate impact finance for social venture................................................................................................ 116
Social venture ............................................................................................................................................... 118
Future perspectives: the SocialTech venture ............................................................................................... 118
Guest lecture – Bolton (14/11) ......................................................................................................................... 119
2.7 Impact venture scaling strategies............................................................................................................... 124
Hybrid ideal ................................................................................................................................................... 124
Scale GROWTH......................................................................................................................................... 124
SV’s scaling and growth ................................................................................................................................ 125
Taxonomies for scaling ................................................................................................................................. 126
Case study 4: Embrace ...................................................................................................................................... 135
1. Is the Embrace infant warmer a business opportunity or social philanthropy? ...................................... 135
2. What strategies would you put in place to ensure the economic sustainability of the model (not
repeating the current subsidization strategy from the US with the 1:1 model)? ........................................ 135
Is Embrace’s business model scalable to serve the Indian market? ............................................................ 136
4. In case of scalability across other countries, Which country would you choose to start from and why?
Would you involve additional local / international actors in your scaling strategy in the local market? If yes,
which ones, of what nature (public, private, ngos…) and why? .................................................................. 136
2.8 Social-tech innovation ................................................................................................................................ 137
A broader picture.......................................................................................................................................... 137
Are purpose and profits positively or negatively related? ........................................................................... 137
Managing the profit purpose trade-off through innovation ................................................................... 139
“Future-incompatible “features of technology and innovation ................................................................... 140
SO, what do we do? ...................................................................................................................................... 142
2
, Where to learn from? ................................................................................................................................... 143
Social tech innovation................................................................................................................................... 143
3 Finance for sustainability ................................................................................................................. 145
1.1 Finance for impact ................................................................................................................................ 145
Reasons of new financial models for sustainable development .................................................................. 145
Trends on financial markets ......................................................................................................................... 147
The emergence of new models of participative finance .............................................................................. 148
Guest lecture – Three Hills (04/12) ................................................................................................................... 156
Our firm ........................................................................................................................................................ 156
Our impact … ................................................................................................................................................ 157
Guest lecture – Banca Sella (05/12) ................................................................................................................. 157
Who we are and what we (intentionally) do ................................................................................................ 157
Impact manifesto .......................................................................................................................................... 158
How to change? ............................................................................................................................................ 158
The innovators’ approach: no compromises ................................................................................................ 158
(De)risking through innovation..................................................................................................................... 158
Our intention of impact ................................................................................................................................ 158
“Make an impact” plan ................................................................................................................................. 159
Closing remarks ............................................................................................................................................ 159
3.2 Finance for impact: instruments ................................................................................................................. 160
Alternative Finance ....................................................................................................................................... 160
Responsible finance ...................................................................................................................................... 162
Sustainable investing .................................................................................................................................... 163
Microfinance ................................................................................................................................................. 164
Impact investing ........................................................................................................................................... 165
3.3 Public-private partnerships for impact ....................................................................................................... 170
Why PPPs and social impact? ....................................................................................................................... 170
PPPs evolution and case studies................................................................................................................... 172
The role of social impact measurement (SIM) in PPPs ................................................................................. 179
3
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