Business with a Mission: Aligning Shareholder Value and Social Goals
TRF believes in local talent. TRF also believes that nonprofits and businesses alike can advance social and environmental missions. This ongoing series will cover different ways in which businesses – big and small – tackle pressing social and environmental challenges. This first installment provides a snapshot of three approaches that align business interests with social missions.
Corporate Citizenship and Shared Value: The “Greening” of Existing Value Chains
When large companies demand from their providers high standards in terms of environmental stewardship and social footprint management, a positive ripple effect occurs.
When industry leaders like Starbucks began to pay premiums for ethical and environmental sourcing, the industry as a whole paid attention. Coffee farms absorbed fewer harsh chemicals. Coffee farmers and pickers lived in better conditions. Coffee drinkers consumed healthier coffee.
TRF enables corporations to strengthen their connections to the social and environmental stakeholders they work with, helping convert natural ecosystems and community well-being into competitive advantages, not just an additional cost.
Impact Investing: Businesses Designed to Solve Social Challenges
Impact investments are investments made into companies, organizations and funds with the intention of generating social and environmental impact alongside a financial return. Here’s the story of an entrepreneur and his mission-driven business in a rural Mayan village in the Yucatan Peninsula.
Despite his community’s limited access to formal education, markets and health services, Vidal Pat developed a small enterprise, Miel Pat. It produces an unadulterated organic honey from a variety of bees including the near-extinct Mayan stingless Melipone.
Miel Pat’s business model offers solutions to multiple challenges. In a marginalized community, the enterprise generates income, provides access to a global economy and inspires entrepreneurship. In terms of health, Miel Pat promotes nutrition through the consumption of quality honey. Environmentally, Miel Pat fosters a thriving ecosystem insofar as the most efficient and effective pollinators of crops and natural vegetation are bees, whose declining global population poses a threat to agriculture worldwide.
Why would TRF invest in a business? Since its founding in 1987, TRF has empowered individuals to improve their lives and communities through nonprofit microfinance and capacity-building programs. Impact Investing harnesses the power of business to advance the same mission, simply through a different vehicle: purpose-driven businesses.
Microenterprise: Economic Growth through Access to Financial Education, Services and Insights
When a family lifts itself out of poverty, neighbors and children observe and learn of what is possible.
Adela del Carmen Loasiga, in a difficult family situation, decided to start producing bread in her home in rural Nicaragua in the mid-1990s. With her hard work, and with the support of TRF affiliate ACODEP, Adela now employs about 20 people and produces a wide variety of breads. As a single mother, she’s putting her children through school.
Reliable, local organizations, like ACODEP, with the necessary business acumen and awareness of the socioeconomic context, play an important role in equipping motivated individuals with financial education, services and insights. These entrepreneurs, in turn, generate new small enterprises, strengthen existing businesses and create a vibrant, entrepreneurial community.
To learn more about these and other approaches to fueling Latin America’s entrepreneurial spirit while advancing social and environmental missions, contact TRF directly.
By Gian Paolo Einaudi, TRF Director of Social Investments