Investment in social impact is an increasingly relevant and decisive practice for companies that want to strengthen a responsible image. According to the GIIN report, social impact investments totaled US$ 1,1 trillion around the world in 2022. Still, to Alfi, Luxembourg Fund Industry Association, estimates that the demand for investments in assets with environmental purpose, social and governance (ESG, the acronym in English) among European investors is expected to grow by 15,9 trillion euros — approximately US$ 21 trillion — until 2026
At the end of 2023, European institutional investors had already, inclusive, allocated a total of 3,7 trillion euros in ESG assets, and the forecast is that this value will reach 19,6 trillion euros by 2026. The universe of startups aimed at entrepreneurs who develop businesses with social impact achieved record growth in the investment market last year. According to data from Halcyon, American incubator, investments surpassed the mark of US$ 1 trillion, driven by a wide range of investors, like venture capital funds, angel investors and foundations
According toKarla Suarez, executive director of ColetivA DELAS, DEI specialist, creative economy and fundraising, the benefits of private social investment go beyond the positive impact on the supported causes, also contributing to the construction of a positive corporate image, the engagement of employees and the approach to stakeholders. The problem is that, many of these organizations do not know where to start. "Companies play a fundamental role in social and environmental transformation". Investing in social impact is not just an ethical choice, but also a business strategy that adds value to the brand, strengthens the relationship with stakeholders and drives innovation and sustainability. "Just know where to start", highlights
For organizations that wish to start or enhance social responsibility initiatives, Karla Suarez lists five essential steps
1. Creation of Private Social Investment (PSI) policies
The first step to developing a social impact strategy is the creation of a private social investment policy. This, must establish clear guidelines that define the priority areas of action, as education, environment or social inclusion, always aligned with the company's values and purpose, remember Suarez. Furthermore, the specialist emphasizes that it is essential to determine a dedicated budget, that covers both financial and human and material resources, to sustain the initiatives over time. It is also important to define clear criteria for the selection of projects and partners, ensuring that these choices are in line with the company's mission, ensuring coherence and effectiveness in the implementation of programs
2. Development of Corporate Volunteering Program
A corporate volunteer project is essential to engage employees in the social causes supported by the company. This program should provide various opportunities for employees to actively participate, from one-time actions to ongoing volunteer activities, affirms the specialist. To foster this engagement, it is recommended that the company provide training and incentives, such as specific training and recognition for volunteer work, which can come in the form of hours off dedicated to volunteering or internal awards.
3. Mobilization of the internal audience for social causes
To ensure the involvement of all employees in social impact initiatives, it is important to engage the internal audience through campaigns focused on social impact, aim to raise employee awareness about the importance of causes and encourage them to actively participate in the company's actions. Create spaces for dialogue and participation, such as forums or discussion groups, also allows employees to suggest projects more directly. This strengthens the sense of belonging and promotes a culture of social responsibility within the company, increasing engagement and adherence to initiatives
4. Sponsorship of socio-environmental impact projects
Sponsoring socio-environmental impact projects is an effective way for the company to strengthen its social engagement. For that, it is crucial to identify projects that are aligned with the company's areas of interest and that have the potential to generate a significant positive impact. Establishing strategic partnerships with organizations that already operate in these areas can enhance the results. It is important to implement mechanisms for evaluating and monitoring sponsored projects, to ensure that the objectives are met and that the company's investments are generating the desired impact
5. Communication
Transparency in communicating the results of social actions is essential to strengthen the company's credibility and amplify the reach of the initiatives. "It is recommended that companies publish annual reports", newsletters or even use online platforms to share the results obtainedSuarez finishes.
