FRAMEWORK : Social Enterprise

What A Sustainable Supply Chain of Partners Looks Like

Do luxury goods brands worry about sustainability?

You may think that high-end brands don’t feel the same consumer pressure and internal concern about sustainability. Yet, as Andrew Winston explains in “An Inside View of How LVMH Makes Luxury More Sustainable,” high-end brands “face important questions about the way their business impacts the world.”

Given that controversy surrounds all agriculture, leather goods and cosmetics manufacturers, LVMH still “provides a great example of how to build a sustainability program” for over 70 luxury brands.

As we wrote in our September 8 FRAMEWORK, dealing with the sheer breadth of the UN Sustainability Development Goals challenges all companies. LVMH’s corporate program is a “framework” called “LIFE” (LVMH Initiatives for the Environment)—a “‘strategic backbone’ for programs” to address environmental challenges.

Narrowing the focus to a few sustainability goals, Krug Champagne’s concentration on environmental and social impact demanded partnership and collaboration all along the supply chain—a path that led back to the brand’s roots. Krug felt that it had “lost its connection to the founder’s 19th century ideals about craftsmanship, humility, and quality.” To return to its foundational values, Krug needed to “connect in a deeper way with its growers.”

The brand started a new program to work with growers on sustainability and quality. Today, this closer partnership reduces waste and agricultural inputs such as fertilizer and water to achieve better crop yields and sustainability. Now, CEO Maggie Henriquez explains that the growers and the winemaking team “enjoy product tastings together, allowing growers to enjoy the end results of their work and their crops.”

Henriquez notes: “It’s not normal in our business, and it’s such a moment of connection.”

Krug’s partnership, collaboration and emotional connection with the business, the winemakers and the growers—all in service of environmental and social responsibility—illustrates the power of a “strategic backbone” for sustainability.

FRAMEWORK : Social Enterprise

SHORT TAKE: Social Purpose Business Infographic

Originally published in 2015 by the Now Creative Group from Toronto, Ontario, we’re revisiting their instructive infographic:

What Is a Social Purpose Business?

First, a quick definition—“a Social Purpose Business uses entrepreneurial principles to organize, mobilize and manage a for-profit business that has a social mission at its core and the goals of creating both economic and social value.” The infographic then uses a Venn-like diagram to clearly show the differentiation and overlap in four categories of business:

  • For Profit
  • Corporate and Social Conscience
  • Social Purpose Business
  • Non-Profit/Charity

Further in the infographic, you’ll see: elements of social purpose businesses’ DNA, how a business can create blended value, why it matters, how to get started, and the result.

At Tal Solutions, we’ve guided our business into the overlap between “social conscience” and “social purpose” business. Our culture embraces diversity, includes social purpose partners, emphasizes profit-driving consulting for clients, and aims to fully leverage voice-of-consumer data.

Have you thought about how your own work may have a social purpose?

Take a few minutes to visit the infographic and think about a better world “where businesses build communities, empower citizens, and take care of the environment.”

FRAMEWORK : Social Enterprise

See the Interconnectivity of Business Sustainability and Planetary Sustainable Development

Saving the planet is a big job.

Where to begin?

Bhaskar Chakravorti tackles this question in his article “How Companies Can Champion Sustainable Development”—and I provide an analytical framework for illustrating the interconnectivity between business sustainability and sustainable development.

Chakravorti believes the UN’s Sustainable Development Goals (SDGs) “provide a framework for mobilizing companies to invest in sustainable development in an ongoing way, while also pursuing their own business interests.”

Supported by the Citi Foundation, Chakravorti’s research group from the Tufts University Fletcher School launched a yearlong research effort spanning 2015–2016 “to study inclusive innovators spanning 10 industries.”

The group found the challenge of using the SDGs to be “simply dealing with their sheer breadth.” For example, how do you approach goals as big-picture as “no poverty” and “peace and justice”?

Among the primary findings was the “key lesson at the very outset: figuring out how to begin.”

What the research recommends is a three-step analytic approach to sustainable development:

  • “Segment the SDGs
  • Identify where the company fits
  • Make the business case.”

Here, I’d like to step back and visualize. Imagine an infinity loop that balances sustainable development and business sustainability.

Within this framework, you see an expanded analytic approach that results in aligning measurable outcomes for sustainable development and business sustainability.

The infinity loop shows the fluid integration and interconnectivity of business sustainability with sustainable development. You see the back-and-forth flow of common and critical elements—relevance, strategy, impact. Many businesses grow because they are focused on sustainability goals that align their brand values and corporate actions with those of their customers and clients.

Saving the planet—and helping all its people—is still a big job. As companies learn where to start, they will make meaningful progress toward sustainable development and their own business sustainability.

FRAMEWORK : Social Enterprise

Use Data to Expand Risk Management for Financial Inclusion

“Promoting financial services for the world’s 3 billion financial underserved represents meaningful social progress, but it’s also good business,” Kathleen Yaworsky contends in her American Banker article, “Financial inclusion starts with better data.”

Yaworsky believes that “reaching the underbanked with products that lead to future growth and revenue” is “about the data.” And she thinks the data must be “better.”

I think the answer more likely lies in fully understanding and using the data, integrating new data with existing data, using technologies to more easily analyze the data—and then finding better insight to solve the risk/reward equation.

The question isn’t who will serve this population—large commercial banks, FinTech, medium enterprise lenders—it’s who can better gauge, understand and balance the risk involved.

Yaworsky quotes Paulo Marques of Capgemini: “Data is a journey where you’re heading toward the unknown. So, you have to start with the known.”

What we know is that the 3 billion financially underserved people is an unknown population.

Starting with that known in mind, financial services need to better use “big data” to find ways of applying the risk/reward equation to this underserved population.

As Warren Buffet says, “risk comes from not knowing what you’re doing.”

When financial services large and small, old and new, expand how they manage risk, the 3 billion underserved people around the world will be better served.

FRAMEWORK : Social Enterprise

Are “impact-based” banks really new?

What is an “impact-based” bank?

For an answer, let’s examine Mary Wisniewski’s American Banker article “Hub for the High-Minded Matches Depositors, Banks with Same Values.”

Wisniewski explores this new trend by looking at Mighty, an early-stage startup marketing platform that “aims to help consumers compare banks based on social-impact performance.” Megan Hryndza, co-founder and CEO of Mighty, explains: “The new competitive advantage is not just going to be having great technology. It’s going to be great tech and why should I care about your business.”

Mighty believes that banks can connect with Millennials by doing a better job “in sharing the work they do in their communities.” Hryndza sees Mighty’s platform “as a way to amplify their message.”

As Vincent Siciliano, President and CEO of New Resource Bank, states: “A bank is uniquely positioned to be an agent of change, and in our case, we have values of sustainability, transparency and community that drive the direction of the change we want to see in the communities we live and work in.”

To graphically illustrate this socially responsible business model, New Resource Bank published an infographic that shows “where your money goes” when you deposit funds with the bank.

© New Resource Bank, 2017]

© New Resource Bank, 2017

This ought to give you a good idea of what an “impact-based bank” is. Yet, the real question is whether this trend is really new.

When you look at New Resource Bank’s “banking solutions,” you see traditional retail bank financial products. However, what is new is that their positioning and transparent communications clearly show the value-based businesses they invest in with their customers’ money – environmental protection, health and wellness, education and community empowerment, and sustainable commerce.

Traditional banks – global, regional and community banks – have long been advancing wellbeing for people, communities, businesses and organizations where they live and beyond. They do this not only with special programs and grants but also with the core products and services they provide to their communities.

But Mighty has a point.

Traditional banks may be burying their good work in annual reports. However, banks need to better amplify how they do good for their communities with both their special programs and their core services.

If all banks showed their customers “where your money spends the night” like New Resource Bank does so well, we’d be amazed at the numbers and reach of the customers’ deposits being put to work.

The banking community can only be enriched by new “impact-based banks.” In fact, it’s a good lesson that everyone in financial services can learn about how to better tell the world, Millennials included, about the values and impact traditional banks have — and the good they too fund in the world.