moving ahead together: implications of blended value for the future of our work jed emerson,...
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Moving Ahead Together:Implications of Blended Value
For the Future of Our Work
Jed Emerson, Copyright 2004
Parts of a Common Journey…
Social Enterprise
Sustainable Development
Philanthropy(Venture Philanthropy,
Strategic Philanthropy, etc.)
Social Investing
Corporate Social ResponsibilityValue Maximization
Traditional For-Profit Companies
+1
-1
+1-1
FinancialInvestments &
Numeric Returns
Social CapitalInvestments
& Social Returns
A Zero-Sum Dissonance:The Traditional Value Proposition
Quad A Quad B
Quad DQuad C
Economic Value
Social Value
Social
Environmental
Values & Systems
Economic
Externaldrivingforces
Internaldrivingforces
A strong commitment to Business Principles and SD
RenewableBusiness$0.5b
Carboncosting
H2Business
Texaco
Wind
Malampaya
DJSI
Financialroadmap
Solargrowth
ShellReport
GHGtargets
BrentSparRe-used
Child LabourAward
Shell Foundation$250m
ISO Cert.
K11
Community development in Nigeria
C.ChairDiversity Target
VentingTarget
Diversitytarget
FlaringTarget
1995 2010 +2000 2005
Implications For How We Think About:
The Nature of The Firm Capital Investment
(Market-rate, Concessionary, Philanthropic) Tracking Performance Development and Dissemination of IC How We Organize Our Work and “Field(s)”
The Nature of The Firm
From Value Creation perspective, there is no difference between FP + NP.
Currently, NPs under-perform economically; FPs under-perform socially/environmentally.
Focus must be upon form, function and leveraged relationships that maximize total value—not issues of corporate structure.
Capital Investment (Market-rate, Concessionary, Philanthropic)
“Objective” economic capital market process viewed as lodged within social and environmental context.
Capital Markets will seek “highest and best use” of capital…
But in pursuit of full, blended value. Diverse Investors take complimentary
positions in pursuit of multiple returns and generation of full, blended value.
Core Elements of Foundation Asset Management
1. Asset Alignment 2. Strategic Grantmaking Practice3. Engagement, Transparency,
Accountability to Relevant Stakeholders4. Development/Dissemination of IC5. Active Education, Policy Development
and Advocacy6. Leverage of Environmental Value
Unified Investment Strategy Capital Allocation
Grant(Program)
AvailableCapital
Grant(Infrastructure) Grant
(Research andDevelopment, Seed Funding)
RecoverableGrants +
PRIs
FROI Risk Boundary
RiskFree Rate
TreasuryNote
6% FROI
TraditionalDiversifiedInvestmentportfolio
EquityLinked
ZeroCouponBond
With SRIIndex
Options
VC FundOr AngelInvesting
PrivateEquityInvesting
SociallyResponsibleAngel andSocialVentureCapitalFundInvesting
SROI Risk Boundary
A Unified Investment Portfolio
Tracking Performance
Financial return analysis, “evaluation” of nonprofit social impacts, and double/triple bottom-line frameworks are all needed to explore various components of capital performance and value creation—
but there is one bottom-line, a bottom-line reflecting a single, non-divisible blended value proposition.
Tracking Performance
Documentation of non-financial performance will migrate from “external reporting” to internal, integrated MIS.
Organizations (whether firms or investor groups) that are “built to last” view New Metrics as critical to firm management and maximizing value of both the venture itself and strategic partnerships.
Development and Dissemination of IC
Future Knowledge will emerge from between the silos and not within.
Knowledge will develop based out of practice informed by reflection and history.
Academic institutions will increasingly cultivate Intellectual Capital driven by a commitment to intellectual curiosity and academic inquiry—
not donor development.
How We Organize Our Work and “Field(s)”
The emergence of Value Networks will drive the organization of our work and structure our fields of practice.
These Networks will be both spontaneous and facilitated—but they will be driven by mutual pursuit of common challenges in structuring capital, advancing New Metrics and leveraging diverse resources to assure maximum impact.
Blended Value ProcessOverview of Blended Value Map
Practitioners (CEO’s,
Managers, Social Entrepreneurs,)Corporate Social
Responsibility (CSR)Social
Enterprise
Investors
Strategic/Effective
PhilanthropySocial Investing –
Socially Responsible
Investing (SRI)
Social Investing – Community &
Double Bottom Line Investing
Topics
Resource Organization
s
Initiatives
Leadership Examples
Areas to Explore
Organizational
Capacity
Capital Question
s
Sustainable Development
Regulatory, Policy and Tax Code
Resources (Books, Articles,
Websites)
Issues Under
Discussion
Cross-Cutting Issues
Measurement and Metrics (Non-
profits & CSR)
Implications
Infrastructure
Creation of Value Networks to
Leverage Cross-Silo
Collaboration
Blended Value ProcessTheory of Change Overview
Value networkingacross the silos of:•Corporate Social Responsibility• Social Enterprise• Social Investing• Strategic/Effective Philanthropy• Sustainable Development
Around the cross-cutting issues of:• Capital• Metrics• Leadership & Organizational Capacity• Government Policy/Regulation/Tax Code
Increased economic return and social/ environmental impacts far beyond the potential of incremental efforts of existing organizations.
Emerging Blended Value Practices Lead to:
Supporting Government Policy/Regulation/Tax
Code
Improved Leadership and Organization al
Development
Increased Capital into Blended Value Organizations
and
Increased Effectiveness of that Capital
Evolution and Application of More Effective New Metrics
More Efficient Social Capital Markets
Interim Points Toward the Future…
An Expanded Vision Grounded in Pursuit of Total, Blended Value for Both Individual Investor and Shared Community Benefit
A Commitment to Working Together Through Value Networks That Build Connections and Leverage Total Assets
A Dynamic Platform of Support for the Development of “The Field” as a Whole
A Final Thought…
"Every company has a diagram of the universe in which they're the center. That's never true. We're all a node in a mesh."
Douglas Busch, CIO of Intel Corp
For more information…
Please see “The Blended Value Map: Tracking the Intersects and Opportunities of Economic, Social and Environmental
Value Creation,” as well as the supporting annotated bibliography and other
documents available at www.blendedvalue.org
Graphic credits
The graphic of a fractal is taken from a web site maintained by Uwe Krueger: http://i30www.ira.uka.de/~ukrueger/fractals/html/b5a.html and I would like to thank him for posting it for public use.
Fractals may be thought of as graphic representations of mathematical formulas which have “high degrees of self-similarity.” They are “finite areas bounded by infinite lines”…For more on this, please see: http://www.jracademy.com/~jtucek/math/fractals.html
The graphic of a photo taken from the Hubble Space Telescope is from the NASA web site.
Other graphics in this presentation are from reports, articles and presentations made by Jed Emerson and the staff of the Blended Value Map Process.