Once upon a time we had charity non-profit businesses at this end of the spectrum, and for-profit traditional businesses at the other end. I'm Rakhi Mehra, co-founder of mHS City Lab, a social enterprise in India. So you may be wondering what a social entrepreneur like me is going to help for your understanding on social and sustainment businesses? There are two trends that we are witnessing today that may help make this connect. Trend one: We have mission-driven social sector organizations that are evolving from a grant base model to a revenue base model to scale and drive sustainable impact. Trend two: We have businesses from the traditional sector that are embracing sustainability for innovation, returns, and sustainable impact. With these trends we are converging to the concept of sustainable businesses, social, environmental, governance, and also financial. But before we talk about sustainable businesses, let's go a little deeper in understanding social enterprises, and then you'll see that the framework for social enterprise may help your own understanding on what should be a sustainable business. Let's define social enterprises, and I'd like to keep it really simple. I’d go with: social enterprises are organizations that pursue a social mission based on a sustainable revenue model, and these enterprises can be offering a service or even a product to an unserved population or to meet an unserved need, be it social or environmental. Interestingly, social enterprises can also be for-profit or non for-profit. M-KOPA for instance is a for-profit social enterprise providing over one million households in Africa access to solar energy. We have families who are serviced by M-KOPA who are able to read, to cook in their homes after the night just because of access to affordable solar energy. Grameen Bank in Bangladesh is a not-for-profit social enterprise where members are the shareholders. In this instance we have revenue-based strategies where all profits are invested back into the business. These innovations in social enterprises also require innovations in the ecosystem. We need a better and more enabled policy environment, knowledge, as well as investors. We have for-profit impact investors, for instance, sustainability in Switzerland, goodwill ventures in the Netherlands that invest in for-profit social enterprises. In Italy we have Accra, and in the U.S. Acumen Fund that are non-profit venture capital funds that also invest with their patient capital in for-profit social enterprises. If you wanted to hear a little bit more about this debate on non-profit and for-profit venture capital funds, it would be very good to hear and see the resource of Professor Muhammad Yunus talking about social businesses. To summarize, we can say that businesses at both ends of the spectrum are very familiar to us. Large grant making organizations traditionally bring charity, as well as traditional businesses. However this excitement is generating right in the middle, where there is a convergence of business models. This kind of movement of a new paradigm also calls for appropriate legislation, and each country is coming up with new ways to do just or social enterprises, and also sustainable businesses. This is a global trend, and internationally many agencies and legislation is adopting for these hybrid enterprises. Global agencies such as Triodos Bank based in the Netherlands, Ben and Jerry's ice cream also in the U.S.; Patagonia, a very very well known outdoor mountaineering equipment maker are all B Corps. And what are B Corps? B Corp is a new certification provided to benefit corporations where they are doing good and making a social impact. B Corps offer an independent evaluation in addition to the certification on an annual basis for agencies such as the Triodos Bank, Patagonia, Ben and Jerry’s and another four thousand entities that are striving a hybrid structure. But there are also countries where such a hybrid model is just not yet ready. For instance the sort of social enterprise that I co-founded in India continues to straddle both the for-profit registration, and the not-for-profit registration, trying to converge to make a social impact. Hybrid organizations are forcing policymakers to think more innovatively. We have regulators around the world in different countries in Europe, in the U.K., In the U.S. that are coming up with different formats. But do we really need to be a B Corp and get the accreditation to do sustainable business? Apparently not. As you have seen, institutions, agencies such as Patagonia, Triodes Bank, Ben and Jerry’s, even making ice cream, even making ice cream, have been doing this for generations. They have been able to get on board their employees, their shareholders, to truly drive impact. This is an exciting time as we see convergence of the social sector and the business sector. We have growing interest in academia, in practice, in industry, the policymakers and most importantly students who are converging with their interest to this field. I would strongly encourage to read three resources on understanding hybrids and understanding social enterprises: and understanding social enterprises. The first is “In Search of the Hybrid Ideal” by the Stanford Social Innovation Review. The second is Professor Yunus’ book on social businesses, “In Search of Impacting Poverty.” and the third is “Let My People Go Surfing” by the founder of Patagonia. Thank you for your interest in social businesses and hope you will stay tuned.
