This post was originally published at bcg.perspectives. By Douglas Beal, Florian Dahl, Sophie Eisenmann, Daniel Nowack, and Frauke Uekermann
A growing number of companies around the world have launched social-business subsidiaries as part of an agenda to bring about positive change. Such businesses are designed to solve a social problem, such as unemployment, malnutrition, or hunger. Unlike a charity, a social business aims to be financially self-sustaining; profits are reinvested to advance its social mission. It is notable and encouraging that large corporations, in particular, are joining this movement, given their deep expertise and ability to scale up initiatives rapidly.
Since 2012, BCG has been partnering with microfinance and microcredit pioneer Muhammad Yunus—a recipient of the Nobel Peace Prize and the founder of Grameen Bank and Yunus Social Business—to advance social-business initiatives. In the course of this collaboration, we have discovered that a social business does not just have a positive impact on the community it is designed to serve. It also delivers tangible benefits to the parent company. (See The Power of Social Business, BCG report, November 2013.) While some of these benefits are to be expected (such as positive brand perception and strong employee engagement), others are perhaps more surprising. We have also learned that companies do not automatically achieve these benefits when they launch a social business. They must be earned through careful upfront planning and thoughtful execution.
We spoke to Molly Burke co-founder of Cycle Connect, our latest investment in our Ugandan Fund. Cycle Connect provides rural smallholder farmers with the necessary tools to propel them out of poverty.
As we, at Yunus Social Business, are tracking and seeing the devastating effect of the Covid-19 virus in the countries where we work, live and hail from, we have been wondering what are the best ways to use our assets.
If I told you that the key to a greener city looked like a lego-style cubic car that could be assembled like IKEA furniture (well almost)… would you believe me? Whilst Elon Musk's view of the future is made up of bullet proof steel, the french startup, XYT is building a future built on inclusion, simplicity and functionality.