Socially responsible investments (SRI) have gained much prominence in the last decade. Businesses and corporations are recognizing their capacity and responsibility to social wellbeing and have chosen to invest where they see a social return. Recently, a more equalized investment scenario has emerged: “creative capitalism” (as coined by Bill Gates), which merges profit generation and maximization with social issue improvement. Creative capitalism is being recognized as THE way to tackle global problems such as climate change, water, disease, terrorism, and hunger.
Yet the Jewish world is still severely under-utilizing SRIs and businesses’ involvement to address our internal needs. Nor does it utilize creative capitalism. Particularly in the current financial climate, the concepts of SRI and creative capitalism should be increasingly examined as new methods for addressing the Jewish world’s growing needs.
Global Corporate Social Responsibility
Corporate socially responsible investments on the ACTIVE level point to the fact that companies have responsibility not only to shareholders but also to stakeholders, as well as the wide array of parties interested in the companies’ actions. These include owners, investors, employees, suppliers, clients, consumers, and the general public. A company has three levels of accountability – financial, social, and environmental.
SRIs are the method by which many businesses look to improve social and environment problems that impact all stakeholders, while also being fiscally responsible. It can range from responsible production, like Nike’s commitment to achieving or exceeding baseline sustainability from the design stage through to the manufacturing stage for all its footwear, to Community Development Venture Capitalist Funds which look to invest in underprivileged areas, generating profit while raising the quality of the neighborhoods (and presumably the standard of living).
Not only has interest in SRIs increased, but so have actual investments due to a growing number of institutional investors now supporting shareholder resolutions on social, environmental, and corporate governance issues, new products, fund styles etc. In the US, for example, SRI assets have risen more than 324% from $639 billion in 1995 to $2.71 trillion in 2007. There, one out of every nine dollars invested is invested in SRIs.
In this era of SRIs playing a key role in a company’s competitive strategy, two new models have emerged which combine corporate financial goals with social ones. The first model, Corporate Social Entrepreneurship, is the transformation of socially and environmentally responsible ideas into products and services (Bill Gates’s “creative capitalism“). It was under this model that Muhammad Yunus created the concept of microcredit, which won him the Nobel Peace Prize in 2006. The second model, Global Corporate Citizenship, has a much wider global perspective. It declares that corporations have a civic duty to cooperate with governments and civil society to contribute to sustaining the world’s well being and addressing its largest issues.
SRIs and the Jewish World:
In the Jewish world, we have traditionally looked to engage philanthropy and government to address our needs. With the decline in the traditional type of philanthropy, particularly amongst younger givers, and combined with the current and foreseeable financial climate, we must engage businesses as a third partner, use new models of philanthropy, and demonstrate that businesses’ financial interests can be addressed at the same time as internal needs.
The question remains: Can the global business concept of SRIs be integrated into the Jewish world, and if so, how? This is our challenge.
Bringing a sense of corporate social responsibility into this traditionally philanthropic realm is new for the Jewish world. Government intervention has been strongly rejected (except for amongst the Orthodox) due to the strong desire to maintain separation of religion and state in the US. Involvement by the Israeli government in broader Jewish issues is obviously in play in Israel and is just starting to emerge in terms of reverse philanthropy to the US. Now, we must engage the critical inclusion of businesses -not solely Jewish businesses and/or Jewish businessmen/women – that have their own strategic interests for addressing needs facing the Jewish community (ies) and engaging them.
Jewish education has been identified as THE key to addressing the biggest issues in the Jewish world such as decreased identity, knowledge, and sense of connectedness. Yet providing universal Jewish education and day school education for those outside of Israel is expensive, sometimes prohibitively so. Providing affordable Jewish education to every Jewish youngster can only happen with the involvement of businesses, particularly those businesses that have a strategic interest in building day schools and their enrollment. Major publishers of Jewish and Hebrew textbooks and educational software, such as Milon, have a strategic financial incentive to work with the Jewish community to increase the number of pupils in day schools. Despite huge incentives, what is still missing throughout this equation is business involvement. Globally, businesses represent the newest, most innovative powers in the quest to tackle major issues, yet the Jewish world has not yet harnessed their power effectively.
In these philanthropically transformative, financially uncertain times, how do we best integrate the business element into the social equation and make them real partners in our effort to tackle the largest needs in the Jewish world?
Ahava Zarembski is Founder and President of Yesod: Strategic Consulting Group and the Yesod-Masad Initiative, providing strategic on Jewish communities in Israel and around the world. For more information contact firstname.lastname@example.org