Achieving the 2030 UN Sustainable Development Goals (SDGs) requires unleashing the positive power of business to deliver social and environmental impacts. Due in part to the 2008 financial crisis and rising awareness over income inequality around the world – leaders from different sectors (whether governments, businesses or non-profits) have begun to pilot innovative approaches to create and nurture ‘profit-with-purpose’ businesses to address these challenges. The SDGs and the 2015 Paris Agreement also provided positive platforms for larger businesses to explore shifts in their own business models.
Despite these developments – including fast-growth in funds dedicated to impact and sustainable investments – most smaller businesses (whether start-ups or social enterprises) that explicitly embed social and environmental goals in their commercial activities face enormous challenges in securing growth finance and scale. Meanwhile, large corporations repeatedly bemoan the dearth of opportunities, as consumers in many parts of the world remain reluctant to pay more (or the so-called ‘true costs’) for socially- and environmentally-sound products and services. Worse still, shareholders do not often value social and environmental practices. The lack of standardised and mainstreamed data and metrics to measure impact is also a major barrier to the scaling of profit-with-purpose businesses.
To help unlock growth finance for promising small and growing enterprises with explicit social and environmental goals, the Hoffmann Centre for Sustainable Resource Economy at Chatham House is undertaking a scoping project to identify key levers to catalyse action, and evaluate and design models for alternative financial intermediaries that support business models which integrate social and environmental impacts into their practice. A series of strategic dialogues in 2019 will convene leaders from finance, industry, start-ups, social enterprises and governments to identify opportunities for action.
This roundtable on Moving from Niche to Mainstream: Finance for Social and Environmental Enterprises, will explore the scale and nature of the challenges and opportunities. It will identify priority areas that warrant additional investment and discuss how existing or new partnerships can help accelerate progress and manage risks.