AFI Partners Curt Nelson and Eric de Valpine discuss "Px8," AFI's online tool for impact assessment and planning.
Free New Online Tool helps Social Enterprises Think About & Plan Their "Impact"
AFI released a short video today discussing their new tool "Px8" (pronounced "pixate"), which help local sustainable food companies - or any social enterprise really - think about and plan for "impact".
What is "Impact"?
We think of "Impact" as building "positive externalities" into your core business model. And, reducing or eliminating "negative externalities".
How Does Px8 Work?
Px8 is a free online tool that presents a variety of impact vectors - eight of them to be exact - that all happen to start with the letter "P" - for companies to think about. It asks questions about current and planned activities, and allows users to self-score on each of those vectors.
Learn More, & Use Px8
To learn more, including the Px8 Scoring Rubric and online tool, please visit the "Impact" page in the "Raise Resources" section of AFI's website.
What a pleasure to stumble on this half hour documentary, "Small Business in America". Produced by local Austin multimedia company Flow Nonfiction, it tells the story of why we do what we do. Even though we had nothing to do with making it! The film touches on concepts of sustainability, and localism, and triple-bottom-line business, but mostly it reminds us that "business", small business at least, is about real live living breathing human beings, and how we interact and treat each other. It is about opportunity, and respect. Beautifully shot, nicely paced, and as an added benefit produced by folks right here in Central Texas. Wow!
We highly recommend 30 minutes of your day enjoying this! Watch it here.
AFI is launching a Facebook page to help connect with Central Texas food based businesses, conscious capital investors, and any other organization or person trying to improve our food system. Please visit us!
Pope Francis in the new papal encyclical Laudato Si released last week:
"In order to continue providing employment, it is imperative to promote an economy which favours productive diversity and business creativity. For example, there is a great variety of small-scale food production systems which feed the greater part of the world’s peoples, using a modest amount of land and producing less waste, be it in small agricultural parcels, in orchards and gardens, hunting and wild harvesting or local fishing. Economies of scale, especially in the agricultural sector, end up forcing smallholders to sell their land or to abandon their traditional crops. Their attempts to move to other, more diversified, means of production prove fruitless because of the difficulty of linkage with regional and global markets, or because the infrastructure for sales and transport is geared to larger businesses. Civil authorities have the right and duty to adopt clear and firm measures in support of small producers and differentiated production. To ensure economic freedom from which all can effectively benefit, restraints occasionally have to be imposed on those possessing greater resources and financial power. To claim economic freedom while real conditions bar many people from actual access to it, and while possibilities for employment continue to shrink, is to practise a doublespeak which brings politics into disrepute. Business is a noble vocation, directed to producing wealth and improving our world. It can be a fruitful source of prosperity for the areas in which it operates, especially if it sees the creation of jobs as an essential part of its service to the common good."
Paragraph 129: http://w2.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si.html
Met with Joe Milam of Austin's AngelSpan the other day. Great meeting, great guy. Here's a blog posting of his from February, that among many great points defines "a good deal is where an entrepreneurial team has identified an opportunity to satisfy an otherwise unmet need that will improve the human condition, and can provide a return for those (in)vested in the successful outcome of that opportunity."
Hazel Bradford writes for Pensions & Investments magazine about the upswing in interest in impact investing from philanthropic foundations.
“We've seen more impact-oriented investment products, particularly those with some kind of track record,” said Reid Smith, a New York-based principal with Mercer Investments who focuses on impact investing. Those include strategies focusing on, for example, LEED certification and green building; moderate-income housing; and timber, with a conservation angle. “The challenge becomes, are there enough (such investments) for any particular foundation to align a significant part of their investment pool,” he said.
Arguing that impact investing is a good investment has become less of a challenge. “Historically, the knock was if you are going to do it, you are giving up on the return. Now you can have an impact-focused strategy that actually creates investment opportunities,” said Mr. Smith.
The concept of "Net Positive" says “Businesses have impacts on the environment and society. Some are negative, some positive. For a company to be net positive, the latter need to outweigh the former. To put it another way: The natural world and society should be better off with companies than without them ... "
Jeffrey Hollender writes for the Stanford Social Innovation Review about the "Net Positive Principles":
And, as a bonus, Hollender gives a detailed example of a "net positive" condom company.
Forbes reports that the Case Foundation and B Lab have created a new, faster, simpler way for companies to measure their "sustainability" and "impact" called the Quick Impact Assessment. Unlike B Lab's full assessment, which takes about 90 minutes, the Quick Impact Assessment takes about 20.
We took the Quick Impact Assessment to see how AFI would fare. Of 20 questions, we ranked "above average" on 10; "average" on none; and "below average" on 10. While thought provoking, it isn't clear that the assessment is appropriate for either start-ups (like us), or specific to sustainable food companies. That said, it did take around 20 minutes!
The Huffington Post calls impact investing "Investing for Shared Value" and quotes Michael Porter: "It's a higher kind of capitalism, where investors create social and economic value simultaneously instead of wasting their time investing in companies that are incrementally competing for trivial differences in product attributes and market share." See: their article "Where Does Your Money Spend the Night? Rethinking Capitalism".
Financial advice and investment management services provider HIP Investor offers a framework, and set of steps, to move portions of your portfolio into "HIP" (human impact and profit") investments.
SustainableBrands.com reports that "several prominent banks announced programs that indicate the further maturation of global environmental finance and the Green Bond market," including $100B from Citibank for climate change mitigation, Euro 1B from Deutsche Bank for Green Bonds, and more.
"NEW YORK, Feb. 27 /CSRwire/ - Over seventy percent of active individual investors (71%) describe themselves as interested in sustainable investing, and nearly two in three (65%) believe sustainable investing will become more prevalent over the next five years, according to a new survey published today by the Morgan Stanley Institute for Sustainable Investing. The new report examines the attitudes and perceptions of individual investors towards sustainable investing and considers the broader implications for investors, corporations and governments."
One question we at AFI often get has to do with investor returns, and whether investors need to accept sub-market returns
"The world of food and agriculture symbolizes most of what’s gone wrong in the United States. But because food is plentiful for most people, and the damage that conventional agriculture does isn’t readily evident to everyone it’s important that we look deeper, beyond food, to the structure that underlies most decisions: the political economy," starts Mark Bittman in this incisive critique.
And here's an article he cites as evidence, "Who Should Clean Up Big Ag's Mess?" from 2/7/15 in Common Dreams. The upshot: "For decades, America’s chemical-intensive, industrial farming operations have spewed nitrates and other toxic chemicals, animal waste, ammonia, antibiotics, carbon dioxide, nitrous oxide and methane gases into public air, waterways and communities."
Sara Olsen, founder of social and environmental accounting and management firm SVT Group, lists the 4 myths hindering even conscious business owners from taking first steps to measuring their "impact" beyond typical operational and financial metrics. Spoiler: just starting, with something, is the hardest...
Forbes reports on an article in the Huffington Post by Salesforce.com's Chairman Marc Benioff, where Benioff joins Jack Welch, Alibaba CEO Jack Ma, Unilever's Paul Polman, and John Mackey of Whole Foods in rejecting the idea that the purpose of business is to "maximize shareholder value".
Rather, Benioff says, "We have an imperative to shift from creating shareholder value to stakeholder value… corporate management isn’t just accountable to shareholders… businesses must focus on serving the interests all stakeholders — customers, employees, partners, suppliers, citizens, governments, the environment and any other entity impacted by its operations.”
David Brooks of the New York Times bestows his blessing on impact investing, ending with "Right now social capitalism is a more creative and dynamic place to spend a life."
Saker Nusseibeh asks, in The Guardian, "what is the purpose of investment?", then goes on to suggest "that in employing our resources we hope for some personal gain but also some wider societal benefit. The purpose of investment then must be to act as a pipe that links a nation’s savings (personal savings, pensions savings, insurance monies and so on) to its future economic growth and wellbeing."
"Family Offices" are private investment companies that steward the financial resources of wealthy individuals and their families. According to Family Wealth Alliance, single and multi-family offices represent roughly $1.6 trillion in assets under advisement in North America. A 2013 Financial Times survey found that family offices allocated 17 percent of their assets under management to impact investments.
Yet according to a 2013 CFA institute study, 66 percent of financial advisors said that they were unaware of impact investing.
Here's the full article from Stanford Social Innovation Review.
The Charities Aid Foundation recently released a report called "Philanthropy: A gift or investment" which shows 79% of wealthy under 40s have an element of their portfolio allocated to socially conscious investments, those with some degree of social impact, compared to 57% of the over 40s.
News from AFI; Links to stories on business-for-good, private-company investing, fundraising, & sustainable food.