Solving Social Challenges through Social Business
Guilherme Lichand’s Social Entrepreneurship Seminar asks students to solve a social challenge by developing an idea and a viable business plan. Students acquire practical skills such as how to develop a business idea and create a business plan, measure social impact, pitching ideas to funding panels, mentoring, and handling setbacks.
To kick off this year’s seminar, the participants were invited to a private screening of two film: Machines, a portrait of workers in an Indian textile factory and Invisible Demons, an immersive documentary on the effects of climate change.
Introducing the following panel discussion Guilherme Lichand said how the poetic, yet disturbing documentaries left him hanging between hope and despair about the challenges the world is facing today. Rahul Jain, the director of both films, Simona Scarpaleggia, Cedric Mutz and Guilherme Lichand shared their perspectives and experiences in projects improving the working situation of individuals and environmental issues.
Social Business Experience
Simona Scarpaleggia shared how, during her time at IKEA Switzerland, they joined up with a social enterprise of about 50 women in India specialized in stitching and textiles, to sell the products in their stores in Switzerland. Starting relatively small ensured that the demand could be fulfilled, and the enterprise could grow sustainably. “The idea was never to be a charitable project or a simple production entity for IKEA. We wanted to give initial assistance by offering a sales channel for the first few years”. Five years later the project offered 1500 women an income and was sustaining itself.
Cedric Mutz, who works in Venture Capital and supports start-ups, emphasized the importance of a project to not only be charitable but also economically sustainable. He also notes a shift in venture capital away from pure shareholder value orientation: “If you cannot answer questions on ESG (Environmental and Social Governance) of your project, you will not get capital funding.”
“We know that customers too, are increasingly requesting social standards to be upheld” Guilherme Lichand adds an example from the chocolate industry, in which illegal child labor remains a challenge. The Dutch chocolate producer Tony’s Chocoloneley aims to eliminate child labor in the chocolate supply chain through rigorous controls. These are costly. However, as the company’s success shows, consumers are willing to pay for this. Today, the company has established itself and is collaborating with global cocoa buyers to continue their quest to eliminate child labor in the cocoa supply chain.
Consumer responsibility can be a two-sided sword, Rahul Jain points out. “Yes, there is this logic of supply and demand, however we can’t put all the responsibility on the individual. Its not only about demand, it’s also about availability and regulation, and the role of government.”
But how are social and ecological considerations integrated into policy? “Apply the old business truth of what gets measured gets done”, says Cedric Mutz, “ESG measures are now being integrated into accounting guidelines and from there find their way into regulations. Policy follows public opinion, and people are demanding social and environmental sustainability”.
While the participants might have been oscillating between hope and despair after the films, the panel discussion offered optimistic examples, inspiring the students to seize the challenges and find solutions and business models to tackle them.
We will be following up and presenting the projects at the end of the semester.