Once operating on the fringes of commerce, today social enterprise is a mainstay of the business world: As of 2022, as many as 11 million companies worldwide could be considered social enterprises, according to one estimate.
But the industry is still learning how companies can best balance their priorities. It’s an oversimplification to say social and environmental impact and a company’s bottom line are fundamentally at odds with one another — that a company would have to choose between meeting the needs of its investors and achieving benefits for society and the environment.
Columbia Business School’s Tamer Center for Social Enterprise aims to demonstrate the fallacy of that dichotomy. The center is a resource to educate students and industry leaders to use business knowledge, entrepreneurial skills, and management tools to address today’s greatest challenges — from the climate crisis to creating inclusive economies. Late last year, the Tamer Center brought together some of today’s most prominent social and environmental impact thinkers for its 22nd annual conference, Capital for Good.
Guided by CBS professors, an illustrious roster of entrepreneurs, investors, and policymakers explored some of the biggest questions facing businesses today: How do you make an impact when you have to also prioritize financial sustainability? How can government work with businesses to meet social and environmental goals? And what are some of the greatest barriers to connecting social efforts to the people who need them?
Here are three highlights from the conference.
When Access Is Everything
On any given day, you might use your credit card, access an ATM, apply for financing for a car, or purchase insurance. Chances are, you didn’t have to go out of your way to do any of those things. “All of that makes our lives easier,” said Michael Schlein, president and CEO of Accion, an impact investment nonprofit. “But for 2 billion people in the world? They are left out of the global financial system.”
At the conference, Schlein sat down with former Accion colleague Vikas Raj, a CBS adjunct professor and co-founder of ResilienceVC. They started with the question: What is the financial inclusion challenge facing the world, and why does it matter?
To explain Accion’s work, Schlein offered an example. Imagine an agricultural worker in rural Africa. She gets paid once or twice a year, always in cash. To make a single bill payment, she might need to travel somewhere hours away. And she needs the money she has left to last throughout the year, but she has no safe place to save it so it’s simply tucked under her mattress. “We take [financial services] for granted,” Schlein said. “I want her to be able to take that for granted too.”
Accion started in the 1960s and was a pioneer in microlending throughout South America. Its focus has also shifted to fintech. Raj worked with Accion for eight years, building an investment portfolio of innovators helping to bridge the financial access gap. One such company produces a product called Field Intelligence, which uses artificial intelligence to advise mom-and-pop pharmacies on what to stock; another uses global satellite data to back crop and livestock insurance for smallholder farmers.
Its social orientation hasn’t disadvantaged the portfolio: 80 percent of the portfolio has gotten to Series A. “We’re trying to make a financially inclusive world,” Schlein said. “Some of these are going to fail, and some of these are going to change the world.”
How Government Can Push Businesses Forward
When CBS Senior Lecturer Gernot Wagner shared the stage with Rohit Aggarwala ’00, New York City’s chief climate officer, he posed a very direct question: “The average New Yorker emits half the emissions of the average household living in the suburbs. Is your job to just get out of the way?”
The question highlights Aggarwala’s unique position: New York City is a microcosm of the current tension in the environmental movement. Since the very beginning, the green approach could be summarized simply: Stop. Stop using fossil fuels, stop relying on coal, stop emitting greenhouse gasses — and for decades, that was enough. With its mass public transit and compact living spaces, New York City was already ahead of the curve.
But now, Aggarwala said, as we hurtle toward the deadlines of the Paris climate accords, innovation is the name of the game — investing in green sewer systems and cleaner generation, distribution, and storage of energy, and more. It’s no longer enough to just stop doing the things we know are harmful. Instead, he says, “we need to accelerate” into renewable energy and technologies.
In New York City, that acceleration is represented by Local Law 97, which requires deep emissions cuts from 15,000 of the city’s buildings — 40 percent by 2030 and carbon neutral by 2050. For some buildings, those goals will be comfortably achievable, but for many, “it will be breathtakingly expensive,” Aggarwala said. “Not all compliance saves money.”
Aggarwala realizes that for some companies, it could be cheaper to pay the hefty fines year after year than to comply with the emissions mandates. Rather than blindly imposing fines, he said he plans to take the buildings that are out of compliance next year and enter them into a settlement agreement, where the city can monitor their progress toward the city’s climate goals by investing in new, sustainable technologies. “You have checkpoints before the deliverable,” he said.
“What’s important isn’t the fines,” said Aggarwala. “What’s important is the mobilization of this work.”
The Triple Bottom Line
Where does a good idea for a social venture come from? CBS Professor Jorge Guzman sat down with entrepreneurs Chrissybil Boulin and Kevan de Silva and investor Keith Camhi to explore the perfect recipe.
Boulin is the CEO and founder of Vero Learning, an education technology platform that helps match students with compatible vocational opportunities through pre-employment skill development. De Silva is the founder of Impactica Labs, which builds fintech infrastructure to help families in need access social services without slogging through mountains of bank statements and paperwork — a common deterrent when signing up for essential services. Both companies are part of Camhi’s Techstars Economic Mobility Powered by Samvid Ventures Accelerator for startups.
Camhi identified four key qualities in a successful social enterprise. The first, he said, is the team — and particularly, the founder. It’s essential that a founder “has the ability to articulate the problem. Why were you put on this planet to solve this problem? What unique insight do you have?” Both de Silva and Boulin worked in their respective sectors for years before coming up with their most recent products. “It was only by getting embedded that you were able to observe these problems,” Guzman noted.
After personnel, Camhi looks for a large market — “which means that the problem is big,” he said — and evidence that you’ve done the customer discovery and found that people want to use what you’re building. Finally, and least important, is the idea. “Putting a really good team on a really big problem is more likely to succeed than an OK team working on a really good idea,” he said.
If you’re able to pull together all of those pieces, Camhi said, you don’t have to worry about trade-offs — social impact vs. company returns. As long as the company has an impact objective, “the better the company does, the more of an impact they make,” he said. “We don’t have to think about [impact and profit] separately.”