Aligning business with philanthropy

Aligning business with philanthropy

by Koon Peng Ooi

Increasingly, philanthropists who are keen on maximising the impact of their work are looking at how they can transform their business to be more aligned with their philanthropic activities. More are reflecting on the impact of their business on the environment and society and are asking themselves what they can do to better contribute to a net zero and equitable future.

APC recently hosted a roundtable discussion with members on this topic, and invited Forum for the Future’s Ariel Muller to moderate the discussion. Forum for the Future has been actively supporting organisations in shifting their business model toward a more sustainable one as well as convening key players within a sector to create systemic change.  

One powerful concept that Ariel shared during the dinner was the ‘black elephant’. If a “black swan” event is something that no one could have predicted and has potentially severe consequences, a “black elephant” is something dire that no one wants to talk about. From her experience, this is a good tool to open a conversation and surface sticking points that a country or an industry should be having. It helps to hone in on different stakeholders’ priorities and build consensus on the common issues to tackle.

Ariel also provided some practical recommendations from her experience in driving systems change. First, collaboration is key. Solving pressing issues such as climate change or labour exploitation require businesses and governments to think and act as a collective. This is why fostering a collaborative mindset is incredibly important;COVID-19 has shown that, in some cases, taking care of others is taking care of oneself. As the world becomes more interconnected, systemic change cannot happen without joint efforts.

Second, it is crucial to have the right players in the room to ensure that the collaboration is impactful. Success can sometimes hinge on securing buy-in from certain players. This is where Ariel thinks that philanthropists, many being business leaders themselves, need to devote energy and resources.  

Third, we need to design solutions at the systems level to incentivise the entire sector to move in tandem. Many environmental and social issues result from businesses or individuals not “internalising” certain costs—for example, businesses not being taxed for their carbon emissions, which have contributed greatly towards the present climate crisis; or, businesses not paying enough for migrant workers, which have left many mired in debt. However, “internalising” costs can make a business more expensive to run and put them at a disadvantage, and so it is important to think of solutions that operate at systems level—so that all parties are willing to collaborate and shift together.

As a concluding thought, Ariel argued that because the world is failing to take progressive action against systemic issues like climate change, the changes that societies will eventually have to make will be both more drastic and abrupt. In this case, the philanthropic community will need to think deep about how we can manage the consequences of these necessary transitions and limit the impact on the vulnerable communities in our society.