Marrying Socially Responsible Investment to the Enterprise

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Duration: 3:57
Source: Stanford ECorner
Author: Andrew Kassoy, B Corporation
Copyright: Creative Commons: by-nc-nd
Found: Nov 5, 2009

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It is very hard for these kinds of mission-oriented businesses to grow rapidly, raise capital, even look at liquidity decisions in an environment where they know that both from a legal and a financial perspective the pressure is going to be mostly on creating shareholder value as quickly as possible. And we also we live in a financial market environment where there’s a tremendous amount of capital but almost no one invests their own capital. Everyone is an intermediary for somebody else layered upon layer and layer. And as a result to that, most people act according to a relatively standard set of co-fudiciary duties which are all put in the lens of maximizing shareholder value. And what that means is that for most companies that want to grow they have a decision between sort of selling their soul if you will or at least risking that. Risking that someone is going to take control of their business and say, "That was nice but let's focus on what's really important." And so putting that sense of mission into the DNA of the business with the legal work. And by having those standards which create a comparable set of metrics across businesses in terms of social, environmental performance. Then allows investors who care about those kinds of things to make decisions and put their capital where their values are. And one thing that should be clear, this sound of stuff can sound sort of dreamy or hopeful sometimes in the abstract. But it's important to recognize that there is a huge market of existing activity. We're not making this up. All we're doing really is trying to create some infrastructure that allows people to identify all these kinds of businesses. And allows capital to flow to these kinds of businesses that they can grow into a more significant part of the economy. And so you have today in the $25 trillion equity market in the U.S., you have $2.5 trillion of capital which already thinks about itself as socially responsible. Now it's important to sa...
Language: English
Category: Business
Tags: Andrew Kassoy, B Corporation
Country: United States


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