Social Venture Circle Welcomes the NEXT Economy, with Perspectives Across the Spectrum

What happens when you bring together hundreds of impact-driven leaders, investors, and ecosystem builders to contemplate the economy of the future? You will hear about equity, inclusivity, partnership and collaboration. You may not always hear about fast food chains and scathing assessments of how much impact is actually being made.

This spectrum came together at Social Venture Circle 2019, “Welcome to the NEXT Economy,” an interactive conference last week in Berkeley, California.

What is the NEXT economy?

The NEXT economy, as outlined at the conference, is regenerative, equitable and prosperous for all. It differs from the current economy in that it is not extractive. Extractive economies are resource-based and depend on harvesting or extracting natural resources for sale or trade. Regenerative economies are financial systems that work to regenerate capital through processes, relationships, and interactions.

The NEXT economy envisions one that is not zero-sum. Instead, it flows like nature— cognizant that growth cannot be the only desired outcome; there must be other elements of economic systems that feed, support, cull in order to create a sustainable economy.

The conference also featured an address by Anand Giridharadas, author of Winners Take All: The Elite Charade of Changing the World.

I joined the event on Friday, the morning after Anand’s talk which took a swipe at how much impact is actually being made. Apparently, there was a metaphor he made likening the actual impact being made to a side salad at McDonald’s—a token nod to health, despite growing menus of unhealthy foods and expanding portion sizes. I say that because the analogy was referenced multiple times during the day.

The morning commenced with a discussion about how the critical assessment landed with participants. Do you agree that the impact sector is grossly underperforming in its effectiveness? How do you feel about the idea that much of the social enterprise and impact investment efforts actually comprise a vanity sport aimed at appearances of social, civic, and equity progress without substance?

Our circle had mixed perspectives. A few individuals agreed with the critical assessment, while others took objection to the negative tone and sentiment. This is what progress looks like. It’s slow, it’s imperfect, and we wish it could be done in a day.  No, we aren’t doing enough. We aren’t being uncomfortable enough. We are not ready enough to make others uncomfortable with the truth.

By the end of the discussion, when tasked to share our takeaways with all attendees, we shared what we each agreed—that we must speak up and speak out more courageously and more often. We must not be silent, even if (especially if) we are not represented by the majority or do not have direct access to power. When our voices rise loud enough to be heard, they can be included, and if they aren’t included, then they are conspicuously excluded– for others to see.

Erika’s career has been firmly rooted in financial services and social impact, with over a decade at UBS and through partnering and advising institutions such as Sustainability Accounting Standards Board (SASB) and the United Nations Global Compact. Her turn to founding Cornerstone Capital was aligned with her firm belief that impact investment is the future.

She started the session by defining terms such as socially responsible investing– entailing systematic environment, social, corporate governance (ESG) integration. She defined impact investing as intentional (i.e. using ESG analysis), additional (i.e. but for your investments, some social good would not have happened), and measurable.

An interesting observation in her talk was her reflection that the 17 UN SDG’s are “uninvestable” because they, and the 169 targets associated with them, are not actionable to investment indicators. She offered the Access Impact Framework, which her fund has created to connect the SDG’s to investment.

• “Sacrifice Nothing, except indifference” article by Cornerstone Capital
  • Excerpt: “More than 2,200 research studies conducted since the 1970s have considered the connection between environmental, social and governance (ESG) criteria and investment performance. At first, these studies examined the most basic questions, such as whether a public equity portfolio that excluded certain companies for ethical reasons would underperform unconstrained portfolios. The results of these studies have consistently confirmed that social screens do not compromise investment performance.”
• Access Impact Framework by Cornerstone Capital
  • Description: “Cornerstone Capital Group’s Access Impact Framework™ illustrates how our clients’ portfolios align in support of the UN Sustainable Development Goals. The framework links the Sustainable Development Goals to investment activities through a focus on access — access to the natural, human and economic resources that will create a more regenerative and inclusive world.”

I attended the session, “Mapping the Investment Landscape” in which Topher Wilkinson of Opportunity Collaboration, Kate Byrne of Intentional Media (family of global brands including SOCAP, SOCAP365, Good Capital Projects, Conscious Company Magazine/Website and What Will It Take women’s movements), and Emily Winslow of Social Venture Circle discussed the recent efforts to create a nonprofit tool to map the ecosystem for impact investment, which is growing with new investors joining the space at a rapid clip.

The tool, www.impactinvestorlandscape.org is aimed to be informative, and not based on a business model or equity stake. The purpose of the session was open dialogue and discussion to inform and help iterate the 1.0 version of this resource.

Tools mentioned in this session:

• impactinvestorlandscape.org
  • Description: “Our goals are to build stronger relationships across the impact investing landscape, identify synergies and opportunities for collaboration, and support promising impact ventures through their growth stages. In addition to helping funders build relationships across the ecosystem, this collaborative effort will allow entrepreneurs to be more efficient in their search for funding, which means they can spend more time on scaling their companies and their impact. Not yet part of the impact investor landscape?”
• CASE Smart Impact Toolkit
  • Description: “CASE Smart Impact Capital leads you through the three fundamental steps all entrepreneurs must follow to raise the right capital: Strategize to assess your investment readiness and define your investment ask; Target the kind of capital and investors suited to your unique venture, and Close by cultivating investor relationships and agreeing on deal terms that matter. We cover these steps through 9 short modules of easy to use, professional tools and instructions.”
• gust
  • Description: “Mission-critical business tools. Powerful performance benchmarks. Trusted fundraising recommendations. Gust supports you at every point along your entrepreneurial journey so when it’s time to raise money, you have the best shot at investment.”

Standing in our power

 

The final session I joined was the Women’s Community Gathering facilitated by Diane Johnson. The room was adorned with rugs and scarves to resemble a flowing river. Through our small group discussions, we were encouraged to share our learnings from throughout our journeys in pursuit of social impact. The theme of connecting to elements of a river, strong and flowing. After powerful sharing by various participants, Diane read “Continuous” by Maya Angelou. An empowering close to a powerful day of relationship-building.

It is notable that this gathering brought together familiar faces and partners in an intimate setting. Fellow social impact partners and collaborators were on hand, including Angie Mertens of One World Training; Arno Hesse of the Slow Money Movement, Nicola Corzine and Celena Aponte of Nasdaq Entrepreneurial Center, and Naomi Baer of the Center for Social Innovation at Stanford GSB.

It was a good day of learning and reconnecting. I appreciate the opportunity to spend time with fellow ecosystem-builders, meet impact investors, and connect with other catalysts in the community.

It has been 4.5 billion years since Earth was a startup, spun out from a solar nebula accelerator. In that time, it has done what any startup has had to do, it has grown, failed, pivoted, and persevered. And now, we are moving and changing faster today than at any time in the past. What hasn’t happened in billions, millions, thousands, or hundreds of years has happened in the past decades with the exponential furthering of game-changing technologies and unprecedented use of natural resources.

More can be done, sure, but we should never forget that we are not almighty actors, but are ourselves part of vast systems—that precede and engulf us by eons.  The more we appreciate and understand the system in which we work, the better chance we might have to live within it and plant seeds to change it moving forward. And the more courageous voices that are able to guide by being both conscience and truthteller, the better we can steer systems toward regeneration and sustainability.