What do big corporations, millennials and sustainability have in common? | INCAE

What do big corporations, millennials and sustainability have in common?

01 de Noviembre 2014
Olivia Ferris Laporte

Some people believe politics is the way to create social change because there is direct involvement in policy-making and enforcement.  I want to generate change but I’m not so sure about being actively involved in politics. I try to be an active citizen, engage in community activities and generate others. In my opinion, private businesses are one of the most effective social mobilizers.

Private businesses: first steps

One of the first steps for the private sector to encage with civil society was through philanthropy. Donating to communities on behalf of the corporations was a gesture that integrated companies in their environment, it was welcome by the “beneficiaries” and it gave the company a favorable image. As information became more democratic, stakeholders began demanding more of companies. One of the first responses was Corporate Social Responsibility (CSR), a step further from philanthropy.
Although CSR is one of the first strategies for companies to generate impact, there is still a long road to be traveled. Many of the companies that have a solid strategy, do so because high management believes in it, and therefore it is embedded in the company. Other companies that are only focused in a profit-generating paradigm are a big challenge for those of us who understand their potential. Although the trend started in the global north, María Eugenia Brizuela became a pioneer in Latin America. Not only is she a business school graduate, which isn’t very frequent in women in her generation, she also works in finance, which is still male-dominated, where she heads the CSR department in Latin America at a global bank. If we take into consideration, that most of the top 137 companies control the global economy are in the finance sector, integrating a CSR strategy in banks has an enormous potential.

New(er) ways to be socially responsible

A couple of generations later, the Millennials came into play. Generation Y is mobile, fast, impatient and caring. Many surveys and studies have continuously demonstrated how Millennials value more a company that has a positive impact than one that pays more. In conjunction to the paradigm shift, other initiatives to promote sustainable businesses have been developed. For example, Porter and Kramer developed the concept of Creating Shared Value, social enterprise became widespread from the success of the microcredit structure developed by Mohammad Yunnus. Technology is also being a mayor player in promoting social wellbeing through the creation of crowd-sourced platforms. For example, through Zip Car, users reduce traffic, emissions and collaborate with other users. Others include Airbnb, Über and Kickstarter.

“Benefit corporations” or b-corporations, corporations that have a social or environmental business case, is another sustainability promoting strategy that private companies are integrating. You can find a list of companies that are making a difference here. Furthermore, big financial markets are incorporating sustainability indicators into their indexes, for example Dow Jones Sustainability Index and FTS4Good.

Multisectoral communication

Millenials are also fast learners, some are autodidacts and others are like me, who learn best from others. My personal objective is to create impact through the private sector. To do that, I need to learn to communicate effectively to business leaders. To democratize CSR, CSV, b-corporations, social enterprises, we should learn talk in a language friendly to the private sector. This doesn’t mean that we should speak the same language, because it will always be different, we just need to find ways to understand each other and thus promote sustainable businesses.

Finally, even though I believe the private sector is a great mobilizer for social change and environmental well-being, it cannot be done alone. To move towards a more sustainable society, we need to have a multi-stakeholder approach that includes civil society, academia, politics, non-profits and businesses. Gen-Y will be able to create a meaningful shift only through collaborative, holistic platforms.

Suscríbase a nuestro blog