Corporate Sustainability FAQs
Below are the most frequently asked questions regarding corporate sustainability and social entrepreneurship.
"What is Corporate Sustainability?"
Corporate Sustainability, although subject to many definitions, can be described as a set of principles, processes and procedures adopted and implemented by a company in an attempt to meet the needs of its stakeholders - stakeholders that include not only shareholders or investors, but also employees and the communities in which the company exists and operates. Assessing your company's operations from an economic, social, and environmental standpoint is critical and often involves developing written principles and adopting a corporate culture that makes social and environmental issues a central concern.
"What is a Social Entrepreneur?"
A Social Entrepreneur, also subject to many definitions, is someone who seeks to combine for-profit business success - including the generation of profits - with the advancement of a social mission, purpose or cause. These entrepreneurs understand that their social mission drives social innovation and positively impacts society, the economy, and the environment on local, regional and global levels.
"What differentiates a Social Entrepreneur from any other entrepreneur?"
An entrepreneur is typically a person who organizes and manages a business undertaking and is often driven by wealth creation. A social entrepreneur by contrast also organizes and manages business undertakings but they are driven primarily by the advancement of a social mission in addition to wealth creation. Social entrepreneurs often create innovative solutions to advance their social mission which ranges from economic development, renewable energy, health and environmental concerns, and much more.
"How is business commerce affected by Corporate Sustainability or Social Entrepreneurship?"
Increasingly, both customers and the broader communities where socially conscious companies operate are demanding the integration of social values in the delivery and production of goods and services. Socially conscious companies who respond to this demand and demonstrate corporate sustainability within the community can expect to maximize their business success and effect meaningful social change in the process.
"How does the business model differ for a social business venture?"
As with all business ventures the model both from an operational and financial standpoint will vary based upon the goals, objectives and mission of the organization. For social business ventures, the business model may take the form of a corporation, limited liability company, nonprofit organization or some combination thereof. Special legal attention is paid to issues such as corporate governance, corporate sustainability policies, profit allocation, and asset locks to name a few. In addition, all social business ventures, in order to grow, must be organized and operated in such a manner so as to attract outside financing or investors � particularly investors who share in the business's overall social mission.
"Do Social Entrepreneurs or sustainable businesses have to expect lower financial returns from their companies?"
No, absolutely not. Social Entrepreneurs are first and foremost entrepreneurs. They are quite capable of nursing a business venture to financial prosperity. Because Social Entrepreneurs measure their success by their social impact many would argue, and rightfully so, that their overall returns are much higher when analyzing their triple bottom line - economic, social and environmental performance - as opposed to simply analyzing their profits. As to sustainable businesses, their returns are often measured by analyzing their triple bottom line as well.
"Is Corporate Sustainability more problematic for Social Entrepreneurs?"
No. Corporate Sustainability is synonymous with corporate social responsibility, and is a set of processes and procedures adopted and implemented by a company in an attempt to meet the needs of its stakeholders - stakeholders that include not only shareholders or investors, but the communities in which the company exists and operates. Often, exhibiting good Corporate Sustainability practices are inherent in the Social Entrepreneur's business model.
"Is there special financing for social business ventures?"
The concept of Corporate Sustainability and the creation of socially conscious businesses have attracted the attention of many investors and third party lending institutions. There is now a proliferation of angel investors and venture capital funds that are aggressively seeking to invest in socially conscious business ventures. In addition, some traditional lending institutions are starting to pay close attention to the triple bottom line when evaluating these types of business ventures.
"What is the triple bottom line?"
A company's performance is customarily measured in terms of its financial outcomes or profits. However, the triple bottom line is a concept whereby a company's performance in measured not only by financial outcomes, but also by its social and environmental performance. Thus, the triple bottom line measures a company's financial, social and environmental performance collectively.