Why Social Enterprise is the New Sustainability

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BONUS CONTENT: As part of Douglas magazine’s “Brave New World of Business” series, we take a look at attitudes to business sustainability and at British Columbia’s newest business model — community contribution companies or C3s.

This model may well provide the new generations with a way to align their values with the business world: to make difference — and make a profit at the same time.

 

When Sage Baker, chief executive officer and founder of Q5 Innovations Inc. and newly appointed executive director of economic development for the City of Victoria, was making career decisions, she felt she had to make a choice: non-profit or for-profit entity.

“And I still remember being in my early 20s and saying it is a conscious choice, that it is one path or another,” she says.

But, things have changed for young people now.

“I don’t think it’s the same way anymore. I think the proverbial ‘you can have your cake and eat it, too’ is that you can do great things for the world and make money at the same time,” she says. “There is a new generation that is accepting that as a reality. It is not a choice of one or the other. You can have both. And that is a change of mentality.”

But how did that change come about and what is driving it? It is deeper than just a wish to do something different and “better” than previous generations. After all, every generation wants to change the ways things were done before. But this new generation is even more determined to make changes — big changes.

SUBHEAD: Victoria: Where Tech Meets Social

Nico Hawley-Weld is a case in point. He is a 24-year-old Harvard graduate originally from Boston, who attended Pearson United World College in 2006, and is working this summer with Baker at Q5. He describes himself as “an environmental engineer and an environmentalist, turned proud entrepreneur and capitalist.”

He talks about the change in thinking among young people like himself, saying that between 2008 and 2012, there was a huge growth of interest in computer science.

“You know, lots and lots of people, and especially at Harvard, they wanted to be Bill Gates and Mark Zuckerman,” he says. “And what you find is you have a whole other segment of people. I was doing my engineering degree, but I was also living in a house with 30 people cooperatively, super left-wing, and I have literally the most socially ambitious, kindest person that I know saying ‘Nico, I don’t care what is going on in Silicon Valley. I want to provide vegetables for my neighbour.’ I think that the gap between a social and a tech exists all over the world and, in Victoria, we have a unique opportunity to bridge this gap.”

For Hawley-Weld, that gap was, in fact, bridged right here in Victoria.

“Saying ‘entrepreneurship,’ even [seven] months ago — I would not have had a good taste in my mouth,” he says. “I thought, ‘entrepreneurship is about ego, it is about money,’ and I went to a VIATeC mixer and someone just set the record straight. He said — he was talking specifically about a startup — he said all a startup does is find a problem, assemble a team to tackle a problem after demonstrating that it actually is a problem, and then you solve the problem. What of any of my interests wouldn’t have fallen into that category?”

“There’s a unique group in Victoria,” says Baker. “They are saying, ‘wait a minute, these worlds can exist together, and it can be for profit and it can be to make the word a better place.’”

SUBHEAD: Changing the World, With Business

Hawley-Weld says that one of the real desires of the social entrepreneur is to have a global impact: they want to fight poverty. “One of the real obvious ways that tech can help is: lets connect someone over here with someone over there.”

Baker call this a “collaboration piece.”

That’s where a new hybrid corporate model brought into effect by the B.C. government comes in.

This model is called the community contribution company (C3 or CCC), came into effect on July 231, 2013. According to the B.C. government, it is designed to bridge the gap between for-profit businesses and non-profit enterprises. This model, while well-known in the U.K., is the first of its kind in Canada. It allows entrepreneurs in B.C. to pursue social goals through their businesses while still generating a profit and providing investment opportunities to like-minded investors. The C3 regulations were developed in consultation with members of the B.C. Social Innovation Council. Public c
onsultations held in 2010 supported the idea of a new business model like the C3, and the resulting amendments were well-received by the social enterprise community.

Kris Constable, a privacy and security consultant and a self-described “serial entrepreneur” has two companies (One-Day Websites and Victoria’s Idea Wave conference) and is also working on creating a 3C business. He says 3Cs are going to be “game changing.”

I call them social-purpose businesses,” says Baker. “The way that I look at that is that you need to be a for-profit entity, so still make money, but make the world a better place. So that can be education, that can be health, wellness, biotech, that can be a lot of technologies. Those are exciting businesses to be involved in.”

Saul Klein, dean and professor of international business at UVic’s Peter B. Gustavson School of Business says, “There is a greater willingness to frame business challenges within a broader social, economic, and environmental context. I think that this shift is being driven by more awareness of concepts such as the Triple Bottom Line, that are getting greater exposure through our whole education system.”

Young people like Hawley-Weld are exactly the type of entrepreneur who may be able to take those concepts and make them work.

My own interests are in game-changing innovation in food, energy, waste, and manufacturing,” says Hawley-Weld. “These are the pillars of the physical economy and we are in need of grassroots efforts to move towards sustainable practices in these areas.”

For him, the triple bottom line means, “How can we do good and then how can we do good in a manner that pays the bills, because that is the only way to do good that is sustainable.”

SUBHEAD: But Doesn’t Sustainable Mean Green?

For the past decade or so, when businesses talked about sustainability, they usually meant they were somehow protecting the environment. While environmental sustainability is definitely a big priority among new businesses, there is skepticism, especially among younger generations, about how it has been promoted — whether it is real.

“In the new economy, we are definitely moving towards sustainability, a more green friendly economy, but if we are still a far way off from it being 100 per cent honest,” says Constable. “I think I am not convinced. I think there is a lot of room for improvement. To say that anything we are doing is helping the earth is a pretty big claim. As soon as you fly in a plane, you are doing damage…. Unless you are living locally, growing your own food, and not importing it…”

“I was very fortunate that I made it into Deloitte’s Fortune 500 Asia Pacific as a media contact,” says Constable. “So I made it into a room in Hong Kong, with all the top CEOs of all of Asia Pacific, and I was rubbing shoulders with one of the most influential top three green tech businesses in the world.”

Constable asked to interview him about green tech.

“After a few too many drinks, he kind of looked at me and laughs and he said, ‘Oh, you and your North American ideals.’ I said, ‘What do you mean?’ and he said, “There is not a technology out there that is not greenwashing right now.”

Constable adds, “It is kind of a frightening thing to be coming from one of the most influential people in that kind of space.”

“And so what I think it is about is the old school businesses are using green technology and greenwashing as marketing tool, and whether that is right or wrong is a philosophical debate. I think people are moving toward being more green or more sustainable and that is probably good, but to validate that they are actually sustainable — I think is not possible.”

Baker talks about how traditional businesses managed sustainability.

“[In the past], when people talked about CSR — corporate social responsibility — it was about paying a lot of money to build a fancy brochure about how you were doing good things for the environment,” she says. “But you are still printing a fancy brochure that has cost a lot of money. It became a marketing tool more than anything.”

These days, Baker says, sustainability has changed.

“There has been an evolution around sharing values and looking at the triple bottom line more,” she says. “It’s not just about: we putting LED light bulbs in and we can feel good. It is: are we truly having an impact on people and the planet? That sustainability can’t just be environmental — it has to be economic and without that growth and stimulation of the economic perspective, it is not going to support the other environmental piece. It has to be intertwined… Sustainability can now be looked at from an economic perspective as well as environmental.”

“Sage [Baker] has been quite inspiring for me because she has really solidified the language of sustainable growth — in just putting those two words together,” says Hawley-Weld. “You get a lot of people talking about a sustainable economy and you get a lot of people talking about a growth-based economy and much of the time those two ideas are exclusive of each other. That is not how people of my generation think. They are not exclusive of each other.”

Now, for Hawley-Weld, the word “entrepreneurship…. automatically has to include the social and environmental,” he says. “It is like a step beyond. That’s what entrepreneurship is.”

In September, Hawley-Weld will be starting his Master’s degree at the University of Illinois at Urbana-Champaign, where he will be working on understanding the resilience and robustness of natural microbial ecosystems (e.g. swamps, sourdough bread, the human gut) and creating ways to safely engineer new ecosystems for useful ends.

Asked what is most important skill business people need to possess to succeed in today’s world, he replies, “The skill of adaptability is probably the most important skill for people today. And we need to find a way to help each other learn how to do it in a way that’s mutually sensitive.”