At the SOCAP2016 event this past September, one panel proved valuable in gaining insights into how large organizations can help drive impact, small at first, then at scale as programs mature.
The Insight
Treat large competitors strategically as potential partners, or treat people that might benefit from impact investing as actual customers, instead of treating them as just “projects.”
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Joan Larrea, CEO of Convergence, a company that is building the field of blended finance, argued that to get significant capital into impact investing fields, look at large competitors not as enemies but as potential partners. Mars and Danone, for example, stepped forward to be the main funders for a large supply chain fund aimed at reduction of injuries on site, number of women in workforce, etc. Great impacts, but the program may help Danone improve its supply chain in a very traditional way, she said.
Wellington Pak, Director of Business Innovation at FHI 360, leads strategy on impact investing. They have a foundation for which they are the sole backer. He gave the example of a community project, Manila Water, that has had an impact and yielded multiple financial and social benefits.
Manila Water, whose tagline is “care in every drop,” started providing clean water to people who were living in ‘temporary’ housing. Previously they used to buy water from filthy trucks, which came with many environmental and health challenges. Manila looked at these people not as projects but rather as customers, said Pak. They made it clear that this was a paying customer and the economics of it should be clear, while many industry observers assumed they’d lose their shirt trying to do business with such transient people. The people ended up being 99+% payers. Now Manila water has credit history on 2 million people that previously had no chance at establishing that credit history. They eliminated all those truck emissions as well.
Source: Ecopreneurist
