Embedding Climate and Social Innovation into Business

[MaximeBRAUN]

Thanks Katie! From our experience at FUNDES, such ambition must be associated with a clear doctrine of intervention.

Our working philosophy: Addressing business development as the initial condition for social, economic and environmental impact.
Our core belief is that micro, small & medium businesses (MSMEs) have the potential to transform their value chains, ecosystems and communities from the inside. By connecting and empowering those entrepreneurs at every step of the chain, we help them capture more economic and promote sustainable practices.
In Latin America, MSMEs are the backbone of the economy and the lifeblood of their neighborhoods: 98% of all enterprises, generating half of the 250 million jobs on the region.

4 proven levers that can help:

1. Creating and managing networks of MSMEs, to understand their needs, identifying community leaders and facilitate P2P knowledge sharing over time
   SABMiller/AB INbev x IIDB x Fundes - Development network of 26’000 mom and pop shops, around business and sales improvement. Leverage their role as local leaders to kickstart innovative local programs (recycling, urban projects, health awareness…)

2. Applied training on business practices that help develop MSMEs activity in the long-term, using blended learning platforms that combine physical and digital sessions
   Danone x Kiwi x Fundes Mexico = Reactivating traditional retails channels through learning and tech assistance to develop MSMEs’ financial capabilities and incentivize business improving investments

3. Creating and delivering digital products, services and startups directly to MSMEs: solutions which can adapt (features, support) to small or informal enterprises. Focus on core components: payment, logistics, operations, marketing, quality assessment.
   Pymental = A marketplace to give access to digital solutions for MSMEs at the right price, depending on the self-profiling of the entrepreneur and its digital savviness

4. Working with corporations that operate in those value chains to design cooperation programs that integrate MSMEs, such as price stability agreements, anticipated purchasings, transition to formality through cooperatives…
   FUDI (Fundes’ social venture) = a Community-Group Buying service for groceries in vulnerable communities, engaging local pop and mom shops as intermediaries through a viable business model

[Justin_DeKoszmovszky]

Following on Veronica and Anna’s comments, first define the purpose beyond profit. It doesn’t have to be a board-level exercise (though it should be) and you can start with your team or your BU. But having a clear social purpose, a mission, an impact you are seeking to make happen, is a key starting point because it provides focus and a shared objective. We at Archipel&Co partner with clients on this process and we work with two fantastic pros in this space: Vitto Cerulli of Purpose House and Myriam Sidibe of Brands on a Mission. BFP recently published a Purpose Framework with Vitto, which is a great starting point.

[AnnaWarrington]

There is also something about the need to build capacity within the business in systems thinking, or at a very basic level at least joined up thinking. We treat design and supply management as two very different functions for instance, but this is not how the world works. The decisions taken by the design team deeply affect how much social purpose the supply chain management team can inject into their work. For instance if the design team specifies the use of very specific, non renewable materials, there is little room for social innovation in procurement or supplier relations beyond upholding minimum standards. But if the design team states the ambition to collaborate on circular materials that reduce inequality with suppliers, the room for innovation across all three departments radically steps up.

Tapping into seams of existing passion is a good tactic to get started. Businesses are no longer just men in suits, and more people bring more of themselves to work. We’ve seen how much passion lies at the intersections of the greatest challenges we face today, including climate and racial justice, equity for LGBTQI and indigenous communities with biodiversity and conservation. Finding the intersections that matter for your staff and your business purpose is key to finding the richness of possibility.

[Ignatius (Odongo)]

I am Ignatius Odongo, a strategist and Managing Director of Entrepreneurship Journey PTY Ltd. and a partner of Youth Café, Kenya.

Before delving into the discussion on Embedding Climate and Social Innovation into Business, I thought it would be appropriate to have a common understanding of societal innovation.

I adopt the definition given from the Stanford Business School, reproduced here below:

Social innovation is the process of developing and deploying effective solutions to challenging and often systemic social and environmental issues in support of social progress … Solutions often require the active collaboration of constituents across government, business, and the nonprofit world —Sarah A. Soule, Neil Malhotra, Bernadette Clavier

(Source: Stanford Business School; Defining Social Innovation | Stanford Graduate School of Business)

According to this definition, the solutions to social and environmental problems should be effective (they should work or be seen to be working). That progress must be evident as they are being implemented. The solutions must be undertaken collaboratively between business, government, and civil society.

Question 1: How do we embed societal innovation into business?

I believe that societal innovation should be embedded within a company’s business model and not just as an appendage of its corporate social responsibility. In essence, it should be an integral part of how the company does its business, how it creates value, and how it conducts itself as a responsible corporate citizen. Indeed, it should be an integral part of its impact investment. It should not be a one-off process. Instead, it should be embedded in a company’s strategic management processes and demonstrated in its performance management processes, where the results are measured, evaluated and reported.

What case studies and examples demonstrate best practice?

To demonstrate how companies can embed societal innovation into business, I have selected the example of Twiga Foods Limited, a Nairobi (Kenya) based B2B technology-enabled food distribution platform that provides a complete supply chain for a variety of products (Website: https://twiga.com/).

Since 2014, Twiga has been bridging gaps in food and market security through an organised platform for an efficient, fair, transparent and formal marketplace. It sources quality fresh and processed food from thousands of farmers and food manufacturers and delivers from its packhouse to thousands of vendors at prices fair to everyone. Its dedicated team consists of over 1000 professionals in sourcing, sales, logistics, finance, technology, business intelligence, administration and human resource.

The societal problems that Twiga identified:

• The Kenyan agricultural sector can be inefficient and complex, and food waste is high due to inefficient handling practices.
• At the same time, SMMEs fruit and vegetable vendors often lack access to reliable supply and affordable quality supplies.

How Twiga solved the problems:

• Developed a mobile-based B2B food supply platform that supplies fresh foods and vegetables sourced from farmers in rural Kenya, SMME vendor outlines in Nairobi
• Reduced fragmentation in the produce market

Benefits that resulted from Twiga Foods innovation:

• Farmers:
  • The mobile-based cashless platform allows Twiga Foods to offer higher prices and guaranteed market to farmers
• Vendors:
  • Lower prices and reliable supply to vendors
• Market:
  • Helped to reduce post-harvest losses and waste as it matches demand and supply
• The company:
  • Business growth
• Government:
  • Job creation
  • Poverty reduction

Increased taxable base/revenue

[dinarok (Dina Rokic)]

Hello everyone,

My name is Dina Rokic and I am the Executive Assistant to the CEO at NaTakallam. NaTakallam (“we speak” in Arabic) offers high-quality, curated language services delivered by refugees and their host communities through the digital economy.

These services include online language teaching and tutoring, translation and virtual interpretation services, as well as cultural exchange sessions. On the one hand, NaTakallam provides its workers with the training and mentorship needed to perform the services, offering them a pathway to sustainable income during and after displacement and/or in the early stages of resettlement. On the other hand, NaTakallam provides clients with a much-needed service with baked-in impact.

To date, the social enterprise, which is disrupting the way we typically think of humanitarianism/international development, has provided $1,000,000+ in cash to over 200 workers from refugee/host community backgrounds, worldwide. Along the way, NaTakallam fosters intercultural exchange and raises awareness around the daily challenges of life in or near conflict zones, notably through its academic partnerships (with institutions, including Columbia, Duke, Georgetown, Tufts, Yale among others) and while providing services to both private and public sector organizations, such as the International Rescue Committee, Save the Children, Ben & Jerry’s and more.

While originally born to support Syrians teaching Arabic, NaTakallam’s language sessions are now also offered 8 different Arabic dialects, in French (with refugees from Congo DRC, Burundi, Guinea), Persian (with Iranians and Afghans), Spanish (with Venezuelans and Central Americans), Kurdish, Armenian and English (with bilingual speakers).

Home - NaTakallam

Really looking forward to reading everyone’s answers!

[asa.skogstrom.feldt (Åsa Skogström Feldt)]

Every company, big and small, has a role to play in society. The IKEA vision is to create a better everyday life for the many people.

IKEA Social Entrepreneurship delivers to this by focusing on the many people who are vulnerable to enable a more equal and inclusive society.

We work with and support social entrepreneurs in two main ways; 1. creating access to market by doing business with them, producing IKEA products and services sold in stores and online globally, and 2. supporting social entrepreneurs who are dedicated to empowering vulnerable and marginalised people to get better jobs, incomes and access to products and services that improve their lives.

By working together with social entrepreneurs, our co-workers get engaged in and learn about new solutions. We can integrate learning and ways of working with social innovation solutions within IKEA. The rising inequalities need to be handled by all of us together, across sectors, by developing competencies, engagement, expertise and insights and inclusive businesses.
In our social ents accelerator programmes, IKEA co-workers act as advisors and coaches, supporting the soc ents, but also taking learnings and inspiration from them back into the business.
It’s about marrying business priorities, with social impact and where the two can come together.
All this is so IKEA can have a positive impact on people, society and the planet.

[Justin_Perrettson]

Business needs to respond to the needs of society to not only ensure its shorter term relevance as well as its longer term credibility and legitimacy. As such initiatives such as the UN SDGs can help provide a problem/solution framework that can be applied to strategic actions that then enable societal issues to be brought into the core of new business development and opportunities. Within Novozymes we have helped established HelloScience (www.helloscience.io) to drive these types of processes.

[Justin_DeKoszmovszky]

In terms of examples, IKEA is a great one to look to but I’ll let Asa on this panel speak to that! While this event is co-hosted by Unilever, I’ve also been impressed with the work Reckitt (and especially Dettol) have been doing to engage social innovation and build capacity at the corporate and global brand level as well as creating the conditions and materials to inspire, enable and support country-level execution that ladders-up to global impact objectives while making sense locally for both brand and unique local social issues. Sure, there was a global pandemic to jump-start the activity, but it is being done for the long term and there is no going back–social innovation for hygiene and health impact is now embedded at Dettol.

[NicholasRamsden]

Good point Justin re businesses needing to define their purpose beyond profit first…but what if we’re talking about a business that was not really founded on any purpose beyond profit? I’ve worked with a few bosses like this! How to engage with such businesses and promote the idea that a business with a purpose beyond profit might be more successful?

[AmaliaJohnsson]

Thanks Katie. While I agree with all that has been noted regarding the motivation for doing business and the potential of networks, for us working with women is perhaps the simplest, most straightforward way to embed societal innovation into business. Women bring new perspectives, business models and ways of working whether as entrepreneurs or employees. At a grassroots level, this often leads to the creation of businesses solving local challenges and serving the immediate needs of communities.

[dinarok (Dina Rokic)]

NaTakallam is a digital, market-based solution to refugees’ lack of livelihood access. NaTakallam is a for-profit, social enterprise which innovatively leverages the digital economy and refugees’ native languages skills by vetting, hiring and training them as online language partners, teachers and translators, regardless of their location, and connecting them to individual and organizational clients worldwide. In doing this, refugees, who are so often marginalized and prone to abuses on the black market or lack of access to local economies, obtain a restored sense of dignity and purpose, income, and marketable skills that very often help them in their later search for work.

Since its launch, displaced persons have self-generated over $1,000,000USD in personal income. Some refugees have earned up to $1500/month –twice the minimum wages in Lebanon, Turkey, Egypt. . We’ve thus created a new marketplace in which refugees and worldwide users meet, all while leveraging technology and thinking disruptively about how to address livelihoods in fragile states and situations. Refugees have connected so far with more than 10,000 unique language learners, they’ve virtually visited over 200 schools, and provided translation services to more than 100 corporate and non profit clients.

[AmaliaJohnsson]

I’ll provide a brief example: in Afghanistan, poultry and eggs have historically been imported, leaving the value chain open to severe disruption by Covid-19 lockdowns. Over the last 18 months especially, poultry has turned into an essential and lucrative value chain for many women, who are able to keep chickens near their homes and access local markets for sale of eggs. Demand and prices have surged, increasing women’s incomes. But another thing we’ve seen is that women recognise eggs are an ideal source of nutrition for many low-income families – including their own. In other words, women entrepreneurs were posting record profits even as they safeguarded their families’ food security. And that’s quite aside from the societal change that resulted from their participation in markets. For many women, participating in economic activity transformed their confidence and decision-making power, which in turned influenced broader (read: men’s) opinions about women’s ability to work. All of that from something as simple as training women to run poultry farms and sell eggs.

[Justin_DeKoszmovszky]

There are a few strong data points out there to support this: eg: 1) most consumer attitude studies are pointing to increased expectations for brands to deliver positive impact, 2) Unilever brands with purpose are their top performers and 3) investors, led by Larry Fink of Blackrock, are increasingly demanding this longer term thinking.

[MaximeBRAUN]

100% agree Anna. As you say, development problems are often addressed in silos, resulting in solutions designed in silos … !

It becomes essential to cross-experts teams, were passion to solve an issue is shared.

[Justin_Perrettson]

Hi Nicholas - thanks! . I’d like to quote another (more famous Justin (Trudeau), who once said; “You can’t take care of the short term and expect the long term to take care of itself”. So as a business if you are only focused on one “metric” or key parameter you are essentially going undermine your own future growth, especially if your competitors and/or customers start thinking along the lines of “purpose” and “sustainability” before you do. The growth in interest around these issues since 2015 (e.g. SDGs, Climate, Financing for Development, ESG etc.) have now mainstreamed, so it would be interesting to compare how the businesses you refer to would measure up against their peers.

[Justin_DeKoszmovszky]

Another example: I was exchanging with Vitto Cerulli and he pointed out the the new Levi’s ad just launched in the UK. As he put it, they manage to intertwine big issues (Global consumption, waste, social change) while remaining grounded in what the product delivers and by exciting with a new vision of the future. I’ve known Levi’s was serious since my time at PUMA and you can see them embedding their purpose via social innovation throughout the business. On the website’s section Sustainability in Action they showcase the action they are taking. Some examples:

• We’ve made it a priority to educate consumers on how they can extend the life span of their clothing
• We created the first product tag, Care Tag for Our Planet, which offers tips on how to best preserve your clothing.
• We also offer Levi’s® Authorized Vintage, the most authentic, everlasting vintage pre-owned or restored items on the market.

[AmaliaJohnsson]

Thanks Justin, I would agree. At the level of partnerships we are also seeing greater engagement across the board from larger businesses that we work with. Whether directly or through corporate foundations, there is rising engagement in linking grassroots projects to core business principles. This may have been accelerated by the pandemic, but it was already the case before.

[AnnaWarrington]

Oh the joys these bring! There are few approaches to try that may work, but it totally depends on the individual organisation really. One example is to focus on risk - no one likes to hear that their supply chains or manufacturing or market will face volatility, and even the most profit singleminded will want to protect from risk. This can be the unlock into more ambitious, more positive (rather than ‘less bad’), more regenerative and just approaches if nurtured in the right way.

[Justin_DeKoszmovszky]

Justins are always worth listening to!

[KatieH (Katie Hyson)]

Our second question today:

@BFP_Moderator

What are the challenges of embedding societal innovation into core business and how can we overcome these hurdles?