The Business for Societal Impact (B4SI) 2024 Global Annual Conference marked 30 years of convening businesses to advance societal impact. Over the past three decades, the social impact space has evolved significantly, yet social inequality remains a pervasive challenge intrinsically linked to the business world.

This year’s conference brought together business leaders from our network and global organisations to discuss how the corporate sector can come together to address social inequality. Speakers covered emerging trends in the social impact ecosystem around the globe, while senior corporate practitioners within the B4SI network articulated the practical challenges they’ve encountered and offered actionable strategies to drive meaningful change.

In the majority of countries, social inequality continues to rise. Coupled with national policy shifts, this trend has increased doubts in any government’s ability to address systemic challenges, especially in areas with limited or diminishing social support systems.

This evolving landscape creates an even greater need for businesses to step up and address societal gaps, while presenting an opportunity to do the right thing for their consumers and communities.

But beyond doing the right thing, as Sharan Burrow of the Taskforce on Inequality and Social-related Financial Disclosures (TISFD) articulates, fostering fairer societies is vital for economic stability and sustainable business practices. Jeff Hoffman of the Conference Board ESG Center underscores this with a compelling reminder to corporate executives:

“SICK COMMUNITIES CANNOT PURCHASE YOUR GOODS AND SERVICES – HEALTHY COMMUNITIES CAN.”

Businesses must shift from individualistic, zero-sum approaches to collective action, working toward a more equitable future for all.

Inequality creates an unstable environment, which negatively impacts the health and mobility of the talent pools and consumers that businesses rely on. The World Economic Forum’s 2023 ‘Global Risks Report’ ranked the “cost-of-living crisis” as the most severe global economic risk looming over the next two years. Inequality can also lead to disenfranchisement and social unrest, further destabilising the communities in which businesses operate and worsening market uncertainty.

Moody’s 2023 outlook indicates that social risks, particularly those affecting access and affordability of basic services like energy and food, wil have a broad credit impact. These issues are expected to pressure policymakers and affect various sectors, suggesting that social risks continue to significantly influence credit assessments.

Conversely, advancing social equity provides business benefits, such as securing license to operate, attracting talent, and increasing resilience to exogenous risks.

Filling the Guidance Gap: How Businesses Can Address Inequalities with the TISFD

The keynote panel at the conference was delivered by The Taskforce on Inequality and Social-related Financial Disclosures (TISFD). The TISFD was recently developed, introducing a multi-stakeholder approach to addressing systemic social inequalities. While regulatory and reporting frameworks like the Taskforce on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD) have advanced reporting on environmental risks, the TISFD aims to fill the gap in consistent reporting on social impacts.

TISFD seeks to build on existing frameworks to create an economic and financial system in which businesses and financial institutions effectively address their impacts, risks, and opportunities related to people. By fostering collaboration between corporations, nonprofits and rights-holders, it aims to create stronger, fairer societies and economies empowering communities with a supportive ecosystem and equipping them with knowledge to hold financial institutions to account.

Innovative Solutions Driving Equity

Part of this ecosystem are networks developing innovative solutions to how businesses can reduce social inequality, particularly through procurement and impact investing.

Diverting procurement funding towards social enterprises offers businesses a powerful avenue for advancing social equity. As Katerina Hoskova of The Schwab Foundation for Social Entrepreneurship notes, “70% of corporations are interested in partnering with social enterprises, but also feel unequipped due to pricing and partner capacity.” This highlights the need for businesses to create hospitable procurement systems to meet social enterprises halfway while investing in their capacity building to effectively scale impact.

Impact investing is also a growing approach used by businesses. Alonso Ortiz Galán of the Global Impact Investing Network (GIIN) highlights that impact investing has a global footprint of $1.57 Trillion dollars. Unlike traditional philanthropical contributions, impact investing provides the opportunity to create renewable funding for community programmes, providing historically marginalised groups with an ongoing commitment.

However, many companies struggle with navigating the perceived complexities of impact investing due to the prevalence of jargon in the field. Ortiz Galán underscores the need for simplified processes for companies, centring on the creation of digestible management systems focused on bringing investments back to their intended social or environmental impact beneficiaries and measuring how well they met their anticipated returns.

Taking a Shared Value Approach

Leading corporations are integrating social impact into their core strategies, going beyond philanthropy to adopt a shared value approach involving procurement and product innovation teams and thinking about how they can leverage their assets more broadly. Shared value is defined as simultaneously uplifting the communities in which companies operate and advancing business success. By aligning social impact efforts with business priorities, companies can achieve measurable outcomes for communities while strengthening the business case for ongoing investment.

As Paula Murphy of the Bank of Ireland states:

“IT’S NOT ABOUT MAKING A DONATION, BUT MAKING A DIFFERENCE.”

In comparison with their peers, companies that embed social impact across departments, implement robust social impact strategies in line with corporate priorities, and create buy-in at all levels of the organisation are better positioned to avoid and manage disruptions, sustain business activities and even grow their social impact funding in typically adverse times.

As Sharan Barrow of the TISFD emphasises:

“OUR COMMON SECURITY IS BASED ON OUR ABILITY TO BUILD SOCIAL JUSTICE.”

Abigail Lovell, Experian’s Chief Sustainability Officer, explains that adopting a shared value approach has allowed the company to scale its social impact programs. By offering innovative products, Experian is providing essential services to underserved communities while also generating business returns. One example is the Limpa Nome programme in Brazil, which helps consumers renegotiate and restructure their debts.

Robust measurement is key to a shared value approach. By taking an evidence-based approach to social impact and introducing credibility to metrics, businesses enhance the credibility of their social impact programmes when reporting internaly and externally.

This, in turn, helps secure support and buy-in for future programming while enabling social impact teams to demonstrate the value of their work to consumers and decision-makers across the business.

Lastly, a shared value approach cannot succeed without meaningful community involvement. As James Aiken of QBE Insurance states, the economy must serve the community, not the other way around. Lonneke Roza of NN Group adds that businesses must ”bring the outside in”, consulting the expertise of community partners when developing strategies that are truly valuable to societies.

Breaking Down Silos to Build Momentum

One of the most significant obstacles to progress in social impact is siloed thinking. As speakers noted, social impact practitioners too frequently operate in a bubble, while the broader business ecosystem often lacks an understanding of the importance of addressing inequality.

To overcome this, practitioners must convene and communicate the value of social impact work vertically and horizontally across their organisations – as well as with peer organisations – educating departments up to the board level. Social impact teams must share with sustainability teams why it is critical for decarbonisation efforts to be socially equitable. We also need to help finance teams grasp and take into account the risks that social inequalities pose to businesses.

B4SI was founded to bridge these gaps, helping members justify and communicate the importance of social impact initiatives. As we celebrate 30 years and continue to grow with our members, we remain committed to advancing this vital work and empowering businesses to build a fairer, more equitable future.

For a conversation about how B4SI can support your business to manage and measure your social impact across community investment, social procurement and business innovation, please visit www.b4si.net or contact the team at mail@b4si.net.

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Download the Conference Paper PDF: Social Impact in an Era of Inequality