Key Buzzwords and Concepts in Social Enterprise Impact Investing and Socially Responsible Investing

Thinking about social enterprise impact investing and socially responsible investing (SRI) brings up a lot of buzzwords. These terms, while sometimes overused, capture the essence and trends within these fields, emphasizing their focus on social good, sustainability, and responsible financial practices.

Interconnected Terms

Key buzzwords include:

Social Enterprise Sustainability Social Impact Mission-Driven Social Innovation Community Engagement Triple Bottom Line (People, Planet, Profit) Stakeholder Capitalism Empowerment Collaborative Economy B Corp Certification Impact Investing Measurable Impact Financial Return Intentionality Social and Environmental Goals Impact Metrics Blended Finance Catalytic Capital ESG (Environmental, Social, Governance) Factors Theories of Change Investment Readiness SRI (Socially Responsible Investing) Ethical Investing Divestment Positive Screening Negative Screening Sustainable Funds Corporate Social Responsibility (CSR) Value-Based Investing Impact Funds Green Bonds ESG Integration

These terms encapsulate the core aspects and evolving trends in social enterprise and impact investing.

Interpretations and Definitions

While these buzzwords can be used with a variety of meanings, they generally reflect a commitment to social good, impactful business practices, and sustainable financial strategies.

Sustainable Investing

Sustainable investing is about smart investing that focuses on long-term profitable ventures that integrate sustainable practices. It emphasizes the idea that sustainable practices can lead to better returns on investment as well as social impact.

At its core, sustainability comes from sound stewardship of our resources and people.

Definitions and Concepts

Social Innovation

The process of innovating for a particular societal group, aimed at addressing social issues and creating positive change.

Social Impact

The positive change instilled through a venture, quantified through methods like Social Return on Investment (SROI).

Social Return on Investment (SROI)

A quantified measure of the social impact of a venture. For more information, you can refer to the practitioners guide.

Social Business

Often attributed to Muhammad Yunus, social businesses are a stricter version of social enterprises, focusing on sustainable and socially beneficial outcomes. For further details, see the characteristics.

Social Change

A term often synonymous with social impact, highlighting the transformative effects of a venture or business practice.

Lobby and Advocacy

One of the key characteristics of social enterprises is their ability to advocate for the social cause they stand for.

Social Integration

Refers to social enterprises being run for and by the target communities they serve.

Mission Drift

A term for the constant struggle faced by social entrepreneurs in balancing social objectives with financial objectives.

Shared Value Creation

A concept developed by Porter and Kramer (2011) at the multinational corporation (MNC) level, closely related to the mission of social enterprises.

Financial Sustainability

A core characteristic of authentic social enterprises, focusing on long-term financial stability.

Social Investors, Patient Capital, and Impact Investing

Investors who focus on both social impact and financial returns, often with a long-term perspective.

Capacity Building

A significant challenge for social entrepreneurs, focusing on building the ability to support social objectives.

Social Value Creation

The ultimate objective of any social enterprise is to create social value.

The Triple Bottom Line

Refers to the balance of social, environmental, and financial considerations.

Bottom of the Pyramid (BoP)

Refers to the world's poorest socio-economic group, often the market for social entrepreneurial ventures.

Micro Finance

A sector often under the umbrella of social entrepreneurship, focusing on providing financial services to the underserved.

Philanthrocapitalism

A concept combining traditional philanthropy with modern business practices.

For more in-depth information, see my Cube discussing the basics of social entrepreneurship.