Quantification Matters
Published
25 September, 2016Type
PublicationSocietal issues like poverty, hunger, inequality and violence plague the world.
The private sector has a unique ability to convert problems into opportunities. Accordingly, the estimated US$413 trillion assets under management globally could be mobilized for positive social impact.
However, mainstream finance currently does not seem to embark on the opportunities from creating positive social impact.
This report finds that some commonly mentioned barriers to mobilizing finance for social impact are myths, for example, there is no legal obligation for short-term shareholder value maximization.
This report also finds that creating positive social impact can present a good business case, not only in theory: social brands have higher growth rates than the rest of a business and the ICT sector estimates a US$2.1trillion in additional revenue, only from digital solutions that contribute to the UN Sustainable Development Goals (SDGs).
The biggest barrier appears to be a communication gap in demonstrating the social impact business case. Companies should quantify this business case, clearly communicate the numbers, and start to manage social value with the same rigor and stringency like financial value. A mindset shift from social impact as philanthropy towards social impact as business opportunity seems to be one of the biggest levers to mobilizing finance for social impact.