How millennials are driving the conversation.
Whenever I am invited to give a talk about social entrepreneurship, I begin by showing a number of slides related to social and environmental causes and asking the audience which ones they feel moved by. When the audience is packed with young entrepreneurs, university students and activists, the response tends to be an overwhelming show of hands with every click.
“37% of millennials expect employee well-being to be a top corporate priority.”
The difference in reactions is actually part of a broader trend. Deloitte’s 2015 Millennial Report highlights a gap in leadership values across generations. For instance, while 37% of millennials expect employee well-being to be a top corporate priority, only 17% of current senior leaders felt the same.
Likewise, 27% of younger professionals would prioritize making a positive contribution to society and the environment if they were in charge, compared with only 18% of senior leadership.
Imagining their own solutions
Last year the International Labour Organization (ILO) reported that Latin America’s 108 million young people were facing an employment crisis. Given this fact, you would expect young people to be content to accept whatever work came to them. Yet, we observe a very different phenomenon: job scarcity has inspired an entire generation to create their own solutions via start-ups, often solving social and environmental challenges that the market has failed to address.
“ Millennials believe that the purpose of business is not just to make a profit.”
Global Shapers in Latin America are not alone. Deloitte’s 2015 survey of more than 7,800 educated professionals, all born after 1982, shows a generational shift.
Millennials believe that the purpose of business is not just to make a profit: 51% of respondents focused on job creation and improving livelihoods, while 44% stated that businesses are meant to improve society and the environment. Meanwhile, only 46% spoke of profit generation.
It’s more than merely preference; millennials are ready to make career decisions based on their beliefs. In Deloitte’s survey, 66% of young people in emerging markets reported that they were attracted to their company by its purpose. Similarly, a 2013 Net Impact study in the United States found that the life goal of 72% of students was to have a job that made an impact on the causes that were important to them. Another 58% were willing to cut their pay by 15% if it meant working in an organization that shared their purpose.
“66% of young people in emerging markets reported that they were attracted to their company by its purpose. ”
Conscious that public and civil-society efforts to solve our region’s most pressing problems are not enough, we are turning towards the private sector. In the past few years a new breed of business has taken hold across Latin America: Empresas B. Inspired by the B Corporation movement, these companies commit to a social or environmental purpose and measure their progress towards making a substantial impact, without leaving profit aside. In other words, social impact and profit generation are not seen as mutually exclusive: if anything, the forces of both can be harnessed to create new sustainable models.
Supported regionally by Sistema B, the growth of this type of company has been exponential. In 2012, when Sistema B began operations in Chile, only 20 companies had been certified. Today, 178 companies have been certified across South America, with hundreds more undergoing evaluation. There are local supporting offices in eight Latin American countries. Of these businesses, a large percentage is led by young, millennial CEOs and founders.
Purpose-driven businesses are the future
It wouldn’t be fair to attribute the success of the movement to the younger generation alone. Imagining a different purpose for business would not be possible without a few leading B Corporation pioneers in Latin America and their efforts to bring the issue into the mainstream.
“ Social impact and profit generation are not seen as mutually exclusive: if anything, the forces of both can be harnessed to create new sustainable models.”
Brazil’s top cosmetics company, Natura, obtained a Benefit Corporation sustainability certification and became one of the largest publicly traded B Corporations in the world. The B Team, an initiative of business leaders inspired by the B Corporation movement, announced at Davos earlier this year an initiative to ensure sustainability and impact among the world’s top businesses.
Beyond B Corporations, the broader impact sector is growing in Latin America. A Bain and Company enquiry on the region reports that capital committed by impact investment funds increased twelvefold from US$ 160 million in 2008 to roughly $2 billion by the end of 2013.
As highlighted in a World Economic Forum report, the expectation is that this pool of funds will continue to grow as trillions of dollars will be inherited over the next decades by a generation that believes business should play a crucial role in creating a better society. Moreover, there is growing consensus among investors that purpose-driven businesses are also good for the bottom line over the long term.
Engaging in transformational dialogue
In the end, my exchange last week with senior business executives sparked a fascinating conversation about generational values, a shifting paradigm on the purpose of business and the audacity of young leaders tackling societal problems.
As a region, Latin America would benefit from hosting more conversations like this – explorations about the future and how to bring social enterprises from a niche concept to the core of what defines business success.
This year, the World Economic Forum on Latin America wants to “advance through a renovation agenda”. It’s a golden opportunity to revisit the role of the private sector in solving the region’s most pressing problems.
This article first appeared on the World Economic Forum Agenda and was republished with permission.