What is Corporate Impact?

The upside to using business to do good in the world is clear: corporations have an outsized financial imprint on the world, and so making that imprint more socially responsible could be a huge deal. Despite changes in the social or public sector, the private sector will continue to be the largest employer and environmental player in our society for the foreseeable future. Your ideas to harness that power for social good, has the potential to create real and lasting change. This overview will walk you through 8 areas of corporate impact. This is just the tip of the iceberg – so there are numerous links to guide you to dive deeper based on your interests.

1. ESG: Improving the environmental and social practices of companies

Read more about Impact Investing & ESG

At its core, ESG investing is focused on the “how” of a company’s operations, rather than the “what.” Importantly, it is possible that a non-impact focused company scores well on ESG criteria. For example, it is possible that a company that creates iPhone cases is more ESG-aligned than its peers if it pays its workers above industry standards, is working to reduce carbon emissions, and has relatively better board diversity.

Jobs: Entry-level Analyst or Associate roles exist at ESG consultancies, ESG tech companies, banks or investors, and corporations themselves. Some of these roles are attainable right out of school and others require a few years of work experience and exposure to for-profit investing. Since this is a new and evolving field, the criteria for landing one of these roles can vary widely, and networking is critical to understand who may be hiring (or even to learn the names of the organizations doing the work you are interested in). There are a lot of these roles around, but they are also quite competitive. Use (LINK) The Herd, to find alumni working in ESG and talk with them to learn more and broaden your knowledge of the employment landscape.

2. Impact Investing: Making investments in companies to generate both a social and financial return 

Read more about Impact Investing & ESG

Impact investing refers to the investments made by companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. Essentially, the goal of impact investing is to have the best of both worlds: invest in a company that will create financial returns for you and social returns for the world. Classic impact investments are in areas such as clean technology, healthcare, or education.

Jobs: A key decision that you’ll need to make is whether you want to actually be an investor or whether you want to be in a non-investor role within the field of impact investing (there are many of these!). A range of non-investing roles exist, including positions at field-building organizations, doing impact measurement, or working in back-end roles. If you are committed to investing, you likely won’t be able to get an investor position immediately out of school, and so you’ll have to work strategically towards those roles at the start of your career. There are typically two routes that eventually lead to impact investing placements a few years out of school: doing traditional for-profit investing or doing social impact work in the field. The common route is to start by working at a bank or consulting firm to learn how to analyze financials and make investments before pivoting into a fund that is focused on impact. The downside of this is that far more traditional investors are interested in pivoting into this work than there are roles available. The other route is much less clear, but increasingly possible. If you can establish yourself as someone that deeply understands an investment area (e.g., agriculture in the developing world or education technology in the US), there may be opportunities to pivot over to an impact investing fund and use your expertise and connections to source potential deals.

3. Corporate Social Responsibility: Voluntary commitments from companies to do social good in their communities

Read more about Corporate Social Responsibility 

Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. CSR teams sometimes work to improve a business’s internal practices, but this is typically the domain of an in-house ESG team. For the purposes of this guide, we examine CSR that is externally-focused: giving away money to community initiatives, matching employee donations, developing volunteer opportunities, or promoting causes or initiatives of community partners.

Jobs: It is often hard to land a CSR role right out of school, so if this is a goal of yours, you need to position yourself strategically. Working for a nonprofit or foundation can help you pivot into CSR. Sometimes, CSR leaders are also pulled from other positions within a company. This would be a very slow path at a large corporation, but there are much more attainable opportunities to help shape CSR strategies if you are proactive while working at a fast-growing start-up. Finally, there are a few roles at CSR advisory firms that do hire graduating seniors. These firms are small and the positions are very competitive to get.

4. Social Entrepreneurship: Operating a business that has specific social objectives as its primary purpose

Reach more about Social Enterprises

A social enterprise is defined as a business that has specific social objectives that serve its primary purpose. Social enterprises typically use an earned revenue business model that also generates some sort of positive social impact. For example, VisionSpring sells affordable eyeglasses across the globe for the 2.7B people who have been ignored by other producers, and Grameen Bank makes microloans to entrepreneurs that have traditionally been excluded from lending markets. Similar to impact investing, social enterprises have a large range in how much they prioritize and how they define “impact.” In general, a social enterprise will fit into one of four categories:

1. 1. 1. A typical for-profit that frames its work around social impact, often with “give back” initiatives (e.g., TOMS, Warby Parker)

      2. A for-profit focused on a difficult social issue (e.g., Propel, Upsolve)

      3. A nonprofit with a core income-generating product (e.g., Goodwill, Grameen Bank)

      4. A nonprofit that earns some of its revenue but also relies on donations significantly (e.g., Acumen, charity: water)

Jobs: Social enterprises, particularly smaller and quickly growing ones, are often great places to start your career. If you are someone that enjoys learning by doing and taking on a range of roles, working for a social enterprise could be a great way to do so. Because these organizations are often scaling so fast, there are generally fewer formal job postings or processes than other industries. As a result, networking and talking to people in the social enterprise world is a must. Use (THE HERD) to connect with alumni in social enterprise spaces to plug into the professional community and begin learning.

5. Social Impact Consulting: Providing advisory services to nonprofits, foundations, and other organizations focused on social good

Read more about Social Impact Consulting

While you may think of consulting as giving business advice to large corporations, there is a whole industry that focuses on advising nonprofits and foundations on their strategy and operations. The field of social impact consulting generally involves two main actors: small firms that focus on consulting for social impact and large consulting firms that focus on consulting for large corporations but also do some social impact projects at a free or discounted rate. The day-to-day activities of social impact consulting are often similar to the work of traditional consulting—financial models, interviews, research, and presentations—but the focus of the work is quite different.

Jobs: Getting a role at a traditional consulting firm is more straightforward since those firms hire thousands of recent college graduates each year, but it is possible to get an entry-level position in social impact consulting right out of school. If you get a role at a social impact consulting firm, you’ll get to spend all of your time on this work, but entry-level roles typically don’t pay as much as they do at corporate consulting firms. If you hope to be involved in impact work at a traditional consulting firm, it can often be quite hard to do so until you are 2-3 years into your career. Many young professionals complain about misleading promises from corporate consulting firms about their ability to do impact-related work. If you are open to doing additional projects on top of your existing client work, Inspire offers opportunities for pro bono consulting for nonprofits in a more informal setting.

6. Diversity, Equity, & Inclusion: Making organizations accessible to many different people than have historically not been welcome

Diversity is the presence of differences within a given setting. Equity is the process of ensuring that processes and programs are impartial, fair and provide equal possible outcomes for every individual. Inclusion is the practice of ensuring that people feel a sense of belonging in the workplace. There are many different titles and definitions for this work, but the activities at its core center on making organizations accessible to people that have historically not been welcome.

Jobs: DEI roles are rapidly growing in the private and social sectors. A common starting role is as a DEI associate or an HR associate with a focus on DEI. The roles can be both fulfilling and exhausting, with potential to grow quickly within an organization or as a consultant.

7. Results-Based Financing: Linking government funding to real world social impact that is achieved

Results-based financing is an effort to increase government funding for social programs that are effective and structuring funding so that it is tied to the results that are actually achieved in the real world. This work is new and a bit confusing at first glance, so we recommend looking at these overviews from the World Bank, Third Sector Capital, or SIDA.

Jobs: There are a number of results-based financing firms that specialize in creating these agreements between government, social service providers, and funders. Many of these organizations hire entry-level analysts out of school, which represents a great opportunity to build an analytical skill set and launch your career in a fast-growing field. Some of the biggest organizations in this space include Third Sector, Social Finance, Instiglio, and the World Bank.

8. Capitalist Systems Change: Changing the structures that surround capitalism and the role of business in society

Beyond these specific organizations, there are a number of other organizations working to change how corporations operate in the US. Some, like the Long-Term Stock Exchange, are building a platform that incentivizes long-term thinking rather than short-term profit. Others, like B Corp, provide a credential for businesses to incentivize a positive social outcome. Finally, many organizations, such as the Economic Policy Institute or Open Market Institute,  focus on research to influence government regulation and policy.

Jobs: Because the area of capitalist systems change involves a wide range of organizations, the roles vary. In general, if you build up an expertise reading and conducting informational interviews with people who work on these issues, you may be able to find an opportunity doing research, advocacy, or a similar position at an organization focused on capitalist systems change. The best way to learn more is to read articles, follow influential leaders on twitter, and connect with whomever does work that inspires you.

Thanks to our friends at Second Day for researching and sharing this information.