NY Hedge Fund Roundtable: Social Enterprise is like Porn

The NY Hedge Fund Roundtable hosted a great event on CSR and Sustainability this morning, with 5 excellent panelists representing private sector, academia, and social enterprise leaders moderated expertly by Stanley Goldstein. Among the many valuable insights (see highlights below), a standout was Dr. Frank Plantan’s observation that CSR and social enterprise are like pornography: I know them when I see them.

Indeed, a bulk of the discussion focused on accepted standards for social impact to be used by CSR, non-profit, and/or impact investing professionals. Andrew Park of Bloomberg Philanthropies made the valid point that serious work (namely SASB and Global Reporting Initiative) is being done to create these accepted standards. And that once they’re established, we will have a common language to talk about which companies and organizations are doing good work, with numerical and financial evidence for why.

These standards and language will enhance visibility of corporate practices and impact, and thereby incentivize companies to perform well in these areas to attract investors - and consumers! The panelists compared the progress to what we have seen with the introduction of a standard nutrition label for healthy eating, or LEED ratings for green buildings.

Jane Gleeson-White, the Australian author of Double Entry, pointed out that the US focus on numerical indicators provides important benefit to the field. Many international initiatives like the Global Reporting Initiative are broader in their consideration of corporate social responsibility. But the American pressure to quantify social impact will provide familiar data points for analysts and investment advisors to justify their support of certain equities or bonds because of their social impact.

Overall, the panel presented a wonderfully thorough, realistic, and promising view of the prospects for corporate social responsibility within the mainstream investing space. We have plenty of ground to cover, but smart, serious, and well-positioned people are doing what it will take to move toward a more sustainable version of capitalism.

Other valuable take-aways:

- Short-termism is a major obstacle to the pursuit of sustainable capitalism, as laid out by Al Gore’s Generation Management and others.

Impact Investing is on the G8’s agenda for their June meeting, as highlighted by Jen Field of Gerson Lehrman Group. Getting high-profile government buy-in for social finance will lead to important legislative and policy initiatives to advance the field. (For example, budget for Pay-for-Success programs, mandated sustainability reporting, and Benefit Corporations.)

- There is a massive generational gap in the CSR / social enterprise discussion. Young professionals increasinglydemand a job that offers some sense of larger purpose, whether through the work being done itself or pro bono side projects. This means a lot more than the PR-focused ‘green washing’ approach to CSR of the 90s (What is ‘more’? Read one perspective here). Jeffrey Walker, Harvard Business School prof and seasoned executive and investor, saysthis generational gap can also offer an opportunity to bridge senior executives (Boomers) with aspiring social entrepreneurs within or beyond your company. The formidable Cheryl Dorsey of Echoing Green reminded us that there are 80 million so-called ‘Millennials’ in this new generation to help the social impact sector gain traction.