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When President Trump recently announced that the US was pulling out of the Paris Climate Accord, over 100 major US businesses announced their intention to continue their efforts to address climate change. This is a prime example of how companies are responding to stakeholder pressure by developing new approaches and taking a stronger role in addressing complex social issues.
However, many companies still have limits to their ability to achieve social impact goals. Barriers may include lack of internal knowledge on an issue, limited ability to take risks due to legal issues, lack of resources in a specific region, or an internal structure and bureaucracy that does not encourage innovation or risk-taking. Working around these issues has required looking for new solutions. Some innovative companies are finding a solution by investing in social enterprises to not only address social issues but also to explore markets, attract talent, and develop new products or services that may be beneficial to the business.
Companies looking to increase their social impact, and build stronger trust and relationships with their key stakeholders, would do well to consider investing in social enterprises that align with their social impact goals. As this field grows and develops, there are numerous opportunities to begin exploring new partnerships and investments that can align not only with the company goals, but also at the stage that align with the company’s level of development.