There's an increasing wave of data and examples that reflect the rising significance of impact for mission-driven ventures. In summary:

  1. ESG, sustainability, the SDGs, and impact are growing in interest and adoption across private and public markets - with the role of corporations in society clearly shifting from a responsibility to shareholders to deliver financial returns, to a responsibility to stakeholders to deliver on a purpose.
  2. Data suggest that there are material advantages to actively managing for impact (including esg and sustainability), and increasing risks and disadvantages from not doing so.
  3. These advantages accrue across all aspects of business from product and operations to marketing and hiring.
  4. Emerging best practice in business management suggest that business should proactively integrate these factors into the core of their business.

Understanding impact - the effect of a company's products, services, and actions - on people, the environment, and society, is what allows a company to successfully navigate this new reality.

For those who are interested in exploring the direct significance of these trends, Venture Better offers direct support.

Contents

Signals

The following are signals of a fundamental shift in understanding of the role of a corporation in society. These signals reflect the shift that is underway, regardless of any individual perspective or underlying data and rationale. Any venture operating in the private markets should be mindful of and prepared to operate in this context.

Understanding impact - the effect of a company's products, services, and actions - on people, the environment, and society is what allows a company to fulfill that broader role.

Larry Fink's Letter to CEOs | BlackRock

2020 Annual letter by BlackRock CEO Larry Fink "...I believe we are on the edge of a fundamental reshaping of finance." "In the near future – and sooner than most anticipate – there will be a significant reallocation of capital." "But there is no denying the direction we are heading. Every government, company, and shareholder must confront climate change." "Each company’s prospects for growth are inextricable from its ability to operate sustainably and serve its full set of stakeholders." "The importance of serving stakeholders and embracing purpose is becoming increasingly central to the way that companies understand their role in society... a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders." "By contrast, a strong sense of purpose and a commitment to stakeholders helps a company connect more deeply to its customers and adjust to the changing demands of society. Ultimately, purpose is the engine of long-term profitability." "Companies and countries that champion transparency and demonstrate their responsiveness to stakeholders, by contrast, will attract investment more effectively, including higher-quality, more patient capital." "Climate change is different... Companies, investors, and governments must prepare for a significant reallocation of capital." "And in the future, greater transparency on questions of sustainability will be a persistently important component of every company’s ability to attract capital. It will help investors assess which companies are serving their stakeholders effectively, reshaping the flow of capital accordingly. But the goal cannot be transparency for transparency’s sake. Disclosure should be a means to achieving a more sustainable and inclusive capitalism."

Terms and conditions | BlackRock

Annual letter by BlackRock CEO Larry Fink to corporate CEOs (2019) "Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues. These issues range from protecting the environment to retirement to gender and racial inequality, among others."

Business Roundtable: Statement on the Purpose of a Corporation "Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country."

Books

Principles of Sustainable Finance by Dirk Schoenmaker, Willem Schramade - Books on Google Play

This book includes a comprehensive review of academic research and studies relating to the performance affects of active consideration of social and environmental factors in business management.

Research and Publications