On February 28th I attended the Social Innovation Symposium at New York University (NYU) - an event that showcased social innovation in the fields of fashion, ed tech, finance, food, and urban planning. Throngs of academics, executives, and an array of NYU business students gathered in a sunny pavilion to wrestle with a common question: how might businesses juggle their prerogatives for profit and social impact? And how might business students find purpose - and reassurance on some level, I believe - as the shrewd executives of tomorrow?
In a world beset with the intractable challenges of climate change, poverty, and overpopulation, can businesses - organizations that inherently exploit natural resources, create carbon emissions through trade, and vie for ownership of unequal wealth - be part of the solution?
Rosenthal Pavilion, Kimmel Center of University Life, NYU
The idea of corporate responsibility is nothing new, but the theme of this conference felt somewhat apropos given that in mid-January Larry Fink - the CEO of BlackRock (the largest investor in the world) - encouraged executives to make profits with purpose by redirecting their organizations to tackle climate change in his annual letter to CEOS. A call to action from someone that controls $7 trillion prompted action from various global conglomerates: Delta Airlines has committed to going fully carbon neutral by investing in off-setting initiatives and biofuels; Amazon has pledged $10 billion over the next 10 years towards investing in electric trucks and renewable sources of energy to power their massive cloud computing operation; and Microsoft has committed to going carbon negative, investing in new “carbon-capture” technology that can halve its current carbon emissions by 2030 and off-set its carbon emissions since 1975 by 2050.
These are unquestionably positive developments; but is it good enough? Despite their best intentions, Delta will continue flying fuel-guzzling planes, Amazon will continue satiating our over-packaged and over-developed consumer addictions, and Microsoft will continue to bank on the future invention of a carbon-capture technology that doesn’t exist yet.
And if the largest companies in the world are struggling to meaningfully prioritize climate action - and ultimately deconstruct the fundamentals of their businesses and sacrifice their bottom lines - how are we to expect a critical mass of smaller businesses, nascent entrepreneurs, and recent business school graduates to ever follow suit?
Gary Sheinbaum, CEO of Tommy Hilfiger Americas
At the Social Innovation Symposium, I had the pleasure of hearing Gary Sheinbaum, CEO of Tommy Hilfiger Americas, speak about how their business is making an impact in a fashion industry that is plagued by human rights abuses and environmental pollution.
Tommy has made some advances by committing to reduce waste and use more eco-friendly materials in their production. I was especially inspired by their launch of Tommy Adaptive - a line created for children with autism and people with disabilities of all ages. Their approach in developing these unique garments was extremely participatory and co-creative, soliciting feedback from over 2,000 participants with disabilities throughout the process.
Participatory design represents an inclusive and empowering strategy for new product development. And as Mr. Sheinbaum confirmed during his speech, doing “good” can often translate to doing “well” financially - as the launch of Tommy Adaptive has attracted unprecedented numbers of visitors to their website and fosters a positive internal culture among their employees.
Panel: Social Entrepreneurship, the business model of the future
The rest of the symposium was marked by other examples of “doing business for good”: from developing sustainable condoms, to storybooks for marginalized youth, to affordable water filtering solutions for emerging markets. From early stage startups to multinational behemoths, talented business people are tapping into the spirit of Muhammad Yunnus’ “social business”, or developing hybrid organizations that further social and environmental goals alongside their financial objectives. Impact investors are increasingly open to structuring deals around “blended finance” - straddling capital from philanthropy, governments, and profit-seeking investors to propel change-making organizations forward.
Panel: Social Impact through financial innovation
All of these initiatives deserve to be applauded. It marks a shift in consciousness around the role of business in society, and a recognition that we cannot afford for corporations to run amuck while governments and nonprofits fail to address our urgent planetary and societal crises. These social innovation conventions and conversations were certainly not being held enough when I was in business school a decade ago.
It’s all very good. But is it good enough? How much impact can a traditionally structured business have when it still has a fiduciary obligation to maximize returns for shareholders above all else? How much does one organization’s commitment to carbon neutrality (no matter how large it is) matter, when virtually every government on the planet is beholden to the interests of the fossil fuel industry? At the end of the day, how much of our social enterprise efforts and triumphs are self-congratulatory, offering band aid solutions to deep structural issues?
What do you think?
As Ann Mei Chang, author of Lean Impact, shrewdly stated: “it’s important to step back and ask the question, are we trying to empty the ocean with a spoon? In other words, if the size of our problem is in the tens or hundreds of millions, do we have a plausible path to reach a substantial proportion of that audience given our cost structure, funding resources, and degree of complexity?”
How might we revolutionize corporate America, and businesses globally, to do better? How might our corporate commitments be braver, our goals be more audacious, and our movements toward sustainability be stronger? How might we divest from harmful industries, dissolve irresponsible companies, and leverage capital to fund a new paradigm of social good? How might we create an economy for new business school graduates where they can work for organizations that truly push the envelope forward towards making the world a better place?
What do you think? Business is doing good. But is it good enough?