GEN­ER­A­TION GIVE

The cor­po­rate ethos of past decades may have been take, take, take, but a new breed of so­cial en­trepreneurs ap­par­ently has more no­ble as­pi­ra­tions.

New Zealand Listener - - SOCIAL ENTERPRISE - By PAUL McBETH

Is “so­cial en­ter­prise” an over­worked buzz­word de­signed to soften the hard-edged im­age of a profit-driven busi­ness, or some­thing more wor­thy? When cor­po­rates like to trum­pet their char­i­ta­ble work – who they do­nate to, the hours of com­pany time they al­low for vol­un­teer work and the back­ing they give to this or that con­ser­va­tion project – it’s easy to be cyn­i­cal. How­ever, a grow­ing com­mu­nity of so­cial en­trepreneurs is in­tent on set­ting up busi­nesses aimed at al­le­vi­at­ing so­ci­ety’s ills.

A pi­o­neer was Eco­s­tore, whose range of en­vi­ron­men­tally friendly prod­ucts is on su­per­mar­ket shelves through­out the coun­try. Since its 1993 launch, it has set aside a por­tion of prof­its to fund so­cial and en­vi­ron­men­tal ini­tia­tives.

It was a com­plete out­lier when it be­gan do­ing so, but more than two decades later, Eco­s­tore has been joined by such out­fits as Kiwi-Saver fund man­ager Sim­plic­ity, or­ganic pro­duce sup­plier Ooooby and con­sumer-be­hav­iour app-maker Con­scious Con­sumers, which have all set out to make money to do good.

Deb Shep­herd, who teaches en­trepreneur­ship and pro­fes­sional de­vel­op­ment at the Univer­sity of Auckland, sees a lot of young busi­ness heads set­ting up so­cial en­ter­prises as a way to do some­thing mean­ing­ful with­out hav­ing to ac­cu­mu­late wealth first. “There’s a real sense of pur­pose that sits at the heart of this,” she says.

Vet­eran com­pany di­rec­tor Rob Campbell picked up on the vibe in a talk at Par­nell Ro­tary Club in July, where he said, “The gen­er­a­tion com­ing of age now is adopt­ing a new dom­i­nant theme that I per­ceive as ‘the quest for authen­tic­ity’, which has strong so­cial val­ues and ethics at its core.”

The drive to do some­thing mean­ing­ful

Im­pact in­vest­ing dif­fers from “re­spon­si­ble in­vest­ment” by putting money di­rectly into ven­tures that tackle “big prob­lems”.

in­spired Chris­tine Lang­don to jack in her com­mu­nity re­la­tions role with Z En­ergy ear­lier this year to set up the Good Registry, an on­line gift regis­ter where peo­ple opt to nom­i­nate a char­ity rather than re­ceive a present they ­prob­a­bly didn’t want any­way. The idea is it redi­rects funds into wor­thy causes and cuts down the waste that comes with unloved gifts.

“We get re­ally con­di­tioned about what suc­cess is: suc­cess is a cor­po­rate life­style and the salary at­tached to it and the se­cu­rity at­tached to it,” Lang­don says. “It’s scary leav­ing that, but at the same time it’s hugely worth it.”

MORE PROFIT = MORE GOOD WORKS

The Good Registry launches this month, in time for Christmas and four months after Lang­don set­tled on the idea. She has faced the usual ob­sta­cles to set­ting up a busi­ness but has found the so­cial-en­ter­prise com­mu­nity gen­er­ous with their time.

“We’re con­scious that the more peo­ple use the Good Registry, the more its turnover will be and the more im­pact it will have. That’s what will ex­cite us about mak­ing a profit,” she says.

It’s not just the start-up end of the mar­ket lur­ing young tal­ent into so­cial en­ter­prises. Chris Sim­cock walked away from work­ing on big cor­po­rate deals at First NZ Cap­i­tal to pur­sue his so­cial and en­vi­ron­men­tal goals, draw­ing on his in­vest­ment-bank­ing back­ground to es­tab­lish ad­vi­sory firm Im­pact Ven­tures.

He’s been around the coun­try try­ing to raise money from ex­pe­ri­enced in­vestors for the Im­pact En­ter­prise Fund, a tie-up be­tween the Āk­ina Foun­da­tion, New Ground Cap­i­tal and Im­pact Ven­tures, which will fo­cus on lo­cal so­cial en­ter­prises. The fund is aim­ing for $10-15 mil­lion, which would be in­vested in eight to 15 firms, with a life of about 10 years.

Sim­cock says New Zealand is lag­ging be­hind other na­tions when it comes to im­pact in­vest­ing, which dif­fers from “re­spon­si­ble in­vest­ment” by putting money di­rectly into ven­tures that tackle “big prob­lems”.

He has po­ten­tial in­vest­ments in his sights, al­though the first round of fundrais­ing doesn’t close un­til the end of this month. Among sec­tors on the fund’s watch list are agritech, sus­tain­able food pro­duc­tion, clean en­ergy and ed­u­ca­tion.

In do­ing the rounds, Sim­cock has come across 750 or so ­dif­fer­ent so­cial en­ter­prises, nearly 2% of the coun­try’s 39,500 com­pa­nies.

Sim­cock says the ris­ing de­mand from so­cial en­ter­prises for cap­i­tal is driv­ing the ap­petite to in­vest, and the in­tro­duc­tion of im­pact in­vest­ment lines up the goals of in­vestor and in­vestee. That wasn’t al­ways the case in the past.

Shep­herd, who is a di­rec­tor of im­pact in­vest­ment ve­hi­cle Soul Cap­i­tal, says the so­cial-en­ter­prise move­ment is fol­low­ing in the foot­steps of the broader start-up com­mu­nity, which be­gan to achieve the scale and mo­men­tum needed to be taken se­ri­ously about 15 years ago.

“Peo­ple are mo­bil­is­ing and now we’re start­ing to see the in­vest­ment peo­ple say­ing if so­cial en­ter­prises are go­ing to suc­ceed, they’re go­ing to need cap­i­tal, re­sources and support,” she says.

THE BIG END OF TOWN

Those with se­ri­ous money aren’t ig­nor­ing the op­por­tu­nity, ei­ther. A re­port on grow­ing im­pact in­vest­ment by EY and in­vest­ment firm JBWere es­ti­mates it could de­velop into a $5 bil­lion mar­ket from the present $100 mil­lion.

Among the sec­tor’s chal­lenges is the need for a ro­bust mea­sure of the so­cial and en­vi­ron­men­tal re­sults its busi­nesses seek, and the strug­gle many peo­ple have with a po­ten­tial con­tra­dic­tion be­tween the si­mul­ta­ne­ous pur­suit of profit and the higher pur­pose.

Shep­herd warns against over­selling the con­cept. So­cial en­ter­prises aren’t a “pana-

So­cial en­ter­prises aren’t a “panacea” for the world’s woes, nor are they an­tibusi­ness. “The mar­ket is the pri­mary lever.”

cea” for the world’s woes, nor are they anti-busi­ness. “The mar­ket is the pri­mary lever” be­ing used.

“It’s more a melt­ing pot of busi­ness mor­ph­ing into tak­ing more so­cial re­spon­si­bil­ity at its heart,” she says. “There’s a lot of ­blur­ring of the lines.”

Still, she views the evolv­ing busi­ness model as of­fer­ing hope for the wider busi­ness world, es­pe­cially as few lessons seem to have been learnt from the global fi­nan­cial cri­sis a decade ago.

Growth has be­come an un­ques­tioned re­quire­ment of suc­cess, with­out “step­ping back and ask­ing ul­ti­mately what’s the pur­pose, and at what cost”, she says. “That’s where the so­cial en­tre­pre­neur­ial move­ment is say­ing we can’t af­ford to keep op­er­at­ing the way we are at all costs.”

From top, Deb Shep­herd, Chris Sim­cock, Chris­tine Lang­don and Rob Campbell.

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