Interview with Nicolas Malmendier , EVPA
Excursus : Corporate Social Investing
EVPA is a community of around 300 member organisations from more than 30 countries that share a common vision and goal , namely the practice of impactful investing to achieve positive social outcomes . The EVPA Corporate Initiative is a group of 70 corporate social investors who act as ‘ thought leaders ’ to advance corporate social investing , to link up practitioners and to raise the profile of corporate social investors as key players in the impact field .
What is Corporate Social Investing ( CSI )? Corporate social investments are long-term , high-engagement capital investments with the primary objective of creating societal impact . In addition to social outcomes , they can also generate financial returns . Corporate social investing provides great opportunity to engage with social enterprises . While corporate foundations can support early-stage social enterprises through grants , other financial instruments such as debt or equity are required in later stages of development . Corporate impact funds are not legally bound by charitable or foundation law and are therefore ideally positioned to address the needs of more mature social enterprises . Why should companies engage in CSI ? Corporate social investing can be a learning laboratory for new markets and business models . For example , the Spanish petrochemicals compancy Repsol has committed to becoming carbon neutral by 2050 . Its impact fund Repsol Social Impact contributes to this pledge by supporting social enterprises that are playing their part in the energy transition while creating job opportunities for vulnerable groups . 22 CSI can also enable companies to scale social innovation through their value chain . IKEA Social Entrepreneurship , for instance , invests in social ventures that can eventually become suppliers to the furniture company
IKEA . When the businesses become commercially viable , IKEA Social Entrepreneurship steps back and the core business takes over . 23
What are the biggest obstacles and challenges ? Corporate social investing requires C-level buy-in . However , many senior managers are either not yet familiar with this tool or too risk averse to try it . Another challenge is existing ‘ silos ’ between the core business – which does not have the capacity or willingness to focus on social issues – and corporate foundations , which are not permitted to support revenue-generating activities for the respective company . Corporate impact funds come somewhere in the middle and can bridge these silos .
Nicolas Malmendier , Corporate Initiative Associate ,
EVPA , Brussels , photo : Yves Thomassen
What are the countries , sectors and major issues in which corporate social investing is already widespread ? In general , CSI has not yet entered the mainstream . However , some countries in Europe are further advanced in this regard than others : France and the Netherlands in particular can show many examples of corporate social investment . The so-called 90 / 10 solidarity funds , which allow French companies to leverage their employees ’ savings towards social investments , are favouring this trend . The main reason , however , is that the ecosystem was established some time ago . Top decision-makers in France – and now increasingly in the Netherlands – have looked at the good practice of their peers and realised that CSI is a viable option for increasing both the social impact and the long-term competitiveness of their companies .
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