In recent years, we have witnessed a remarkable advance in the link between social impact and the financial sector. This fusion may seem strange at first glance, but it aims not only to reconfigure business, but also promises to transform the social and economic fabric in which we live.
On the one hand, companies are currently changing their long-term strategies to include and energize the dimension of Impact, Social Responsibility and Sustainability in order to become more robust and more transparent in their activities. Companies increasingly want to align their strategy and implement concrete activities in the short term that will allow them to both increase the positive effect they have on society and reduce the negative effect they may cause, with a view to the SDGs - Sustainable Development Goals most closely linked to their activity.
Examples of this alignment are the concern that companies have, in environmental matters, to define the path towards carbon neutrality and/or the circular economy; or the concerns for the well-being of their employees; with workers in the value chain; with the communities affected and with consumers and end users, in the social field.
On the other hand, in the social sector, a culture of sharing good practices has begun through podcasts, books and articles, as well as a culture of recognition through the various awards given out by banks and companies each year. We are beginning to see a transformation in some organizations. There are various training and mentoring programs to raise the level of professionalization of organizations. There are more funding opportunities and more management and impact professionals working in social organizations. Nowadays, trying to have a social business that makes a profit so that it can be reinvested in the organization is possible and well regarded, as is the case with the associations "Reshape", "Just a Change" and "Dona Ajuda", but a few years ago it would have been utopia.
We are beginning to see a transformation in some organizations. There are various training and mentoring programs to raise the level of professionalization of organizations. There are more funding opportunities and more management and impact professionals working in social organizations.
Impact investments are a good example of the union between sustainability and the financial sector. Companies and investors are now looking for opportunities that don't just guarantee financial returns, they want investments that also bring about positive changes in society and the environment, that help make the world a better place. Investment funds and financing vehicles that prioritize ESG (Environmental, Social and Governance) criteria have become key players in driving this financial revolution. In this case, social investments seek social change, as well as making and distributing profits at the end of each year.
In order to measure the degree to which the objectives of impact investments have been achieved, it is now essential to carry out impact assessments. These investments can no longer just show financial indicators, they must assess the real effect they have on society. To do this, indicators must first be defined, based on the triangulation of information sources between the different stakeholders, and seeking a balance between quantitative and qualitative data.
Social impact assessment is not without its challenges. Identifying relevant indicators, measuring intangible effects and attributing causality are complex issues that require expertise and contextual sensitivity. Data collection and interpretation can also be influenced by biases, requiring methodological rigor and transparency. This is the only way to achieve a metrically based approach that provides a clear view of the social value generated by each investment.
One of the pillars of this union is transparency. Organizations in general, whether companies, associations, foundations or financial institutions, are increasingly showing everything they do and opening the doors of their organizations, exposing not only their financial performance, but also their efforts to promote social well-being. This transparency strengthens investor confidence, as well as creating an environment of accountability and collective learning.
Integrating social impact into the financial sector is not just a matter of benevolence, but also of risk management and corporate sustainability. Companies that embrace this approach are better placed to face constantly evolving challenges and scenarios. By proactively identifying and responding to society's demands, they become more adaptable and resilient, allowing them to evolve into a more sustainable business.
The union between social impact and the financial sector transcends the boundaries of companies. We now see entire ecosystems - including governments, NGOs, and the private sector - working together to address complex social challenges. Initiatives such as public-private partnerships and social investment funds are democratizing access to resources and amplifying impact on a global scale. In this way, the union between social impact and the financial sector is redefining the standards of corporate responsibility and driving the search for a more sustainable future.
Integrating social impact into the financial sector is not just a matter of benevolence, but also of risk management and corporate sustainability.
The marriage between social impact and the financial sector promises an exciting and responsible future. It's a journey that has only just begun, and there's still a long way to go. As we move forward, the integration of impact, transparency and sustainability metrics becomes essential for all kinds of organizations seeking to thrive in a world in constant transformation. This union is not just a commitment to the present, but an investment in the legacy of a more sustainable and equitable future for all.
