Wednesday, September 21, 2011

Connected Capital

 Organizations that embody this ethos rather than tack it on to products or advertising will be well positioned to prosper. And not many would quibble with the chance to do good with cash in the process of making a profit. So-called Impact investments (social and environmentally oriented) could hit $ 500 billion within the next five to 10 years, according to Monitor Institute "We're at a very nascent stage" in the industry's development, they say "We don't know how big this could get."

Already, private investment in green economy companies globally is estimated at over $ 1.25 trillion since 2007 which shows how investors and entrepreneurs are leading governments in promoting sustainable growth. In 2008 a tipping point of sorts was reached when more money was invested in new renewable power capacity than in new fossil fuel capacity.

In a broader context, harsh economic reality in the last decade has shown the consequences of not thinking critically enough about our behavior in business and of adopting a short-term rather than a long-term, stakeholder-inclusive approach. Around the world there is a growing awareness and discussion on notions such as "compassionate" and "connected" Capitalism, whereby companies need to address their social license and return to values. This is relevant in the banking sector and required in South Africa to address a range of social and community ills (poverty, unemployment, Aids, abuse, crime, inequality). The reality is that the sate cannot solve all the ills, many still a legacy of apartheid, and the vibrant entrepreneurial energy within the country needs to be ignited. This, together with an increase in conscious awareness of our impact on society and the planet will allow citizen to create their own change.

The awareness needs to be turned into action because it's not happening - a McKinsey study recently showed that companies are not taking a proactive approach to managing sustainability with only 30 percent of executives saying their companies actively seek opportunities to invest in sustainability or embed it in their business practices. When it is a policy it is often a separate department rather than part of the fabric of the business.

In South Africa over 90% of savers researched were positively pre-disposed to placing funds at a sustainable banking institution. This affirms a philanthropy report which showed that wealthy South Africa are the second most generous nation (behind the USA) when it comes to giving money, and rank fourth in volunteering their time to worthy causes (Barclay's Wealth).

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