The corporate and business landscape is undergoing a subtle revolution, where ‘social impact’ is becoming a watchword for good business practices. And leading the charge is a highly motivated band of young MBA graduates hungry to find ‘solutions to global problems’.
‘Social impact’ stands at the confluence of two powerful forces – one creating demand and the other offering solutions. On the ‘demand’ side, businesses are becoming increasingly aware of the social and environmental impact of their decisions, in areas such as climate change, women’s rights, gender equality, healthcare, primary education and the like.
Whether by choice or compelled by legislation that requires companies to budget for corporate social responsibility initiatives, the business world is beginning to hire highly qualified managers to head their social impact divisions. Meeting this need are MBA grads, who are choosing careers in social impact consultancy.
Don’t get us wrong. The numbers, though significant, are still small,and a majority of MBA graduates are still in it for that fat paycheck, working in domains such as management consultancy, finance and investing. But there is a slice of bright, young minds with their eye on the greater good. These are the ‘millennials’ (born in the ‘80s and ‘90s, now in their 20s and 30s), who are searching for meaning, purpose and fulfilment in their work. Many of these young, future managers are keen to make a difference to their organisations, communities and the world, and are even giving up cushy and lucrative jobs in favour of social impact careers.
It’s early days yet and, as we just said, it is difficult to quantify this trend but here’s an indication of how committed these millennials are. According to a global study of more than 3,700 students at 29 top business schools by Yale University, 44 per cent of respondents were willing to accept a lower salary to work for a company with better environmental practices.
“There is a lot of evidence that suggests millennials have a different mind-set towards work, satisfaction and work-life balance,” says Radhika Chadwick, a partner lead at EY. “They tend to want autonomy and to work on very exciting projects all the time.”
Chadwick’s opinion is rooted in more than perception or anecdotal evidence. According to a recent survey of millennials by PwC, ‘development’ and ‘work-life balance’ are more important than financial rewards, among a section of MBA grads.
The time couldn’t be more right for those who want to make a difference. The United Nations’ Millennium Development Goals and numerous international climate change initiatives have given ‘social impact’ global legitimacy, not to mention billions of dollars in funding for non-profits around the world.
But an indication that the tide is truly turning comes from the world’s top consultancy firms, which are beginning to hire MBA grads for careers in social impact consultancy. Deloitte, for instance, launched a new social impact practice in September 2015 and is offering full credit to young consultants who work on pro bono projects. The company also found that nine in 10 companies engage in ‘social impact activity’, in a survey it conducted on Fortune 500 firms.
Deloitte is not the only top global consultancy firm offering young and aspiring MBA gradsjobs in areas like sustainability, healthcare and the environment, says Vimi Emraz, who handles consulting and social impact at INSEAD’s Career Development Center. Others, like McKinsey, Bain and BCG, are too. Experts point out that the reason is that they are increasingly being hired by companies that that have broken their trust in society and need to re-establish their social credentials.
But these firms are all too aware that corporate-social initiatives can no longer be limited to tokenism.They will have to make a quantum change from fund-raisers, sponsoring charity events and supporting social ‘causes’, to building social and environmental responsibility into the heart of their organisations. This is where MBA grads come in – to help them figure out exactly how to marry business with a social conscience.
Striking at the heart of the matter, Peter Bakker, CEO of the World Business Council for Sustainable Development, remarks, “Business leaders need to understand the complex nature of sustainability issues and integrate solutions for social and environmental challenges with the need for good financial results.”
The ball has definitely been set in motion, for heralding yet a new are large conglomerates that are pooling money into ‘social impact venture capital funds’.The money is channelled exclusively into social enterprises and initiatives, and the funds pay out only if measurable social goals have been achieved, such as improving children’s reading ability or reducing crime rates. For instance, education giant Pearson is using social impact venture capital funds to funnel $15 million to social entrepreneurs.
It is easy to see how MBA graduates passionate about driving social change fit into this emerging landscape. And the money is big. According to economic consulting firm EPG, American and British companies in the Fortune Global 500 list spend $15 billion a year on Corporate Social Responsibility activities.
Such is the momentum that even top global banks are jumping onto the ‘social impact’ bandwagon. Thus we have the world’s biggest fund house BlackRock adopting ‘impact investing’ and ‘green bonds’ created to fund projects that have environmental benefits. They are not alone. Says Hugh Lawson at Goldman Sachs, “Our investing clients are interested in deploying their assets in a way that amplifies their broader values while generating investment returns.”
Recognising this for what it is – an integral part of how businesses will have to behave in future – some business school have already embraced social impact and are building it into their curricula. INSEAD has set up the Emerging Markets Institute, a think tank on issues relating to economic development and management, while Boston University’s School of Management launched a concentration in Environmental Sustainability in February 2015. A month earlier, Georgia Tech’s Scheller College of Business launched a new MBA track in Strategic Sustainability.
The number of business schools throwing their hats into the social impact ring is definitely growing. Thus, the Global Alliance for Clean Cookstoves, an initiative led by a UN Foundation, has partnered with no less than five business schools to form investment committees that advise on its $6-million investment fund.
If you’re having trouble wrapping your head around that, here’s something that might explain numbers like that. A recent global survey of business executives by Saïd Business School and consultancy major, EY, reveals that 87 per cent of executives they spoke to said companies perform better if their purpose goes beyond profit – including generating positive social impact. In the words of Cheryl Grise, EY Global Advisory Strategy Leader, “Purpose and meaning have an important role as a strategic, transformational element in business today.”