What may seem like a convoluted economic theory is nothing more than an economic model that seeks to generate both financial benefits and positive effects on society and the environment.
An approach, which still has a long way to go, that seeks to go further by responding to the need to tackle global problems such as poverty, climate change, inequality and lack of access to basic services. For many companies, adopting this model is not only an ethical responsibility, but also a competitive advantage in a market where consumers and employees value social and environmental commitment.
The importance of a social impact economy lies in its ability to promote sustainable and fair development. Rather than focusing exclusively on financial growth, companies operating under this model strive to create shared value: they seek to innovate products and services that respond to social needs while generating economic benefits. It is also an approach aligned with the United Nations Sustainable Development Goals (SDGs), which seek to eradicate problems such as poverty, inequality and climate change. In this way, companies that embrace the social impact economy contribute to creating a more balanced and sustainable world.
The benefits of this approach go beyond ethics and responsibility. In a world of increasing transparency and access to information, companies are under constant scrutiny by consumers, who prefer brands that act responsibly. This is especially relevant for millennials and Z generations, who prioritise values such as sustainability and social impact in their purchasing decisions or even in their career choices. For them, a company’s mission and purpose are as important as the quality and price of its products.
More prepared for change
Adopting a social impact approach can help companies be prepared for regulatory changes. As governments around the world strengthen their regulations around sustainability and corporate social responsibility, companies already operating under these principles will be better positioned to comply with regulations without major difficulties. Moreover, companies with social impact are often better valued by financial markets, which are increasingly rewarding responsible and sustainable organisations.
Preparing for this future means that companies need to re-evaluate their practices and adapt their business model to a social impact approach. This includes reviewing their mission and values, aligning them with a real commitment to social and environmental well-being. Transforming organisational culture and training employees on sustainability and responsibility issues is fundamental.
In the social impact economy, it is essential to build a more sustainable and just world. Companies that choose to adapt this approach will not only be better prepared to face the challenges of the future, but will also gain the trust of consumers, employees and investors. By adopting socially impactful practices, companies can ensure their long-term success, while contributing to the overall well-being and environmental balance.
Sir Ronald Cohen, the father of the revolution
Sir Ronald Cohen, the subject of the new Better Connected interview, a Telefónica initiative, is a pioneering figure in the social impact revolution, leading a movement that encourages companies to generate not only financial, but also social and environmental benefits. As chair of the Global Steering Group for Impact Investment and former leader of The G8 Impact Investment Taskforce, Cohen has worked for decades to transform traditional investment into a tool for positive change. His vision focuses on companies not only pursuing economic growth, but also actively contributing to the well-being of people and the planet.
Cohen believes that impact investing is essential to address global challenges such as inequality and climate change. This approach proposes measuring and evaluating the impact that companies have on their environment, with the aim of maximising the positive effect on communities and reducing environmental damage. His own personal experience, marked by his family’s flight from Egypt to England, reinforced in him a deep sense of social responsibility and motivated him to push for change in the global economy, where human value and respect for the environment are fundamental.
For Cohen, young people play a central role in this revolution, as they show a genuine interest in purpose and ethics, and look to companies to reflect their values. His social impact approach encourages companies to take ethical responsibility, implementing sustainable and fair practices that do not discriminate and foster an inclusive environment.
With his leadership and vision, Sir Ronald Cohen has become one of the most influential voices for social impact, convinced that the economy of the future will depend on a model that combines profitability with social and environmental responsibility.
