Class Class name Question Answers Chapter I : social innovation 1 What is social innovation ? Have you ever heard of social innovation ? Social innovation is the ability for an organisation to reinvent its products and services, as well as its strategy and management, with the aim of creating both economic value and social and environmental value. how are CSR and social innovation related? CSR stands for Corporate Social Responsibility. CSR was originally a self-regulation policy to set sustainability goals. It is now moving to mandatory schemes at national and international levels. Some companies consider CSR as a constraint or a lesser evil, while some build their core strategy around it. The distinction between CSR initiatives and social innovation can sometimes overlap. Social entrepreneurship : covers environmental issues does not think of profit as a goal per se considers economic efficiency as a condition to have a long-term impact Since Rose Mercario joined Patagonia and defined an even more radical sustainable strategy, their profits have tripled . Patagonia's stakeholders are : their customers their employees their suppliers Patagonia wants their products to be traceable, which means : they want to know precisely how their supply chain functions from A to Z. Patagonia's focus on social innovation is : key to their business strategy a way to involve employees 2 The circular economy, a virtuous cycle The best piece of waste is one that is not produced Why do we call the enormous plastic gyre in the North Pacific the "seventh continent" ? because it is as large as a continent If left alone, in a few decades there will be more plastic than fish in the ocean. true. The 29th of July 2019, humanity will have consumed the quantities of resources the Earth can produce in one year. (On the 29th of August, the Earth's biocapacity was exceeded. It took us 210 days to be precise. After this date, our consumption exceeds what the Earth can produce in a year . Every year, the Earth Overshoot Day happens earlier.) In 2015, Europeans (from the EU) bought on average 13kg of clothing per person. It has been estimated that in 2015 EU citizens bought 6.4 million tons of new clothing. A pair of jeans weighs approximately 900g, a sweatshirt about 250g and a T-shirt 150g. In 2016 in the EU, 2,5 billion tons of waste have been generated, which amounts to 80 tons of waste produced every second. 80 tons of waste are generated every second in the EU by all economic activities and households. This means that 288 000 tons of waste should be processed every hour. Do you know what the circular economy is ? The circular economy is a virtuous cycle that rethinks the way we produce goods in order to reduce waste by reusing or recycling existing goods. It also relies on design to reduce the needs of new resources and to make new products that last longer. The circular economy is the opposite of the linear economy : The linear economy is a type of economy established during the industrial age. In this model, resources are used to make a product that will become waste when it is no longer used for its original purpose. It follows a "take-make-waste" logic. The circular economy could allow Eurozone companies to save roughly the equivalent of Argentina's (around €600 billion) GDP each year. 3 When ecology is an asset for business Interface's sustainability-oriented strategy has allowed them to : use fish and chocolate as sources of energy cut costs on many elements of the supply chain Since 1996, Interface reduced its greenhouse gas emissions by 96%. Do you know what carbon accounting is ? Carbon accounting is a method used to measure the amount of CO2 directly and indirectly emitted by an activity. Accounting for greenhouse gas emissions is increasingly framed as a standard requirement for business. It can be used to communicate to shareholders and stakeholders or is sometimes mandatory to sign a public contract. To produce a cotton T-shirt, 2700 litres of water are needed on average. If we take into account cotton production, the manufacturing and dying, 2700 litres are needed for a single cotton T-shirt on average. To produce a recycled T-shirt, 50 litres of water are needed on average. More than 50 times less water is needed than for a standard cotton T-shirt. Among all the actions undertaken by Fernando, which ones correspond to the circular economy ? rainwater harvesting using old wooden pallets to heat the company's offices recycling cotton scraps provided by local factories What will be the outcome if Fernando adopts circular economy principles ? it is good for the corporate identity it could be very profitable 4 Lifespan of products, an environmental issue Do you know what planned obsolescence is ? This is a concept that has been invented by companies in order to sell more goods. They design products that quickly become out of fashion or out of use quickly, therefore prompting consumers to buy new ones. In some countries, companies doing planned obsolescence can be prosecuted. true. Planned obsolescence is a nightmare for the consumer but also for the environment . Fast-fashion is : a disaster for the environment when the time between two collections is only a few weeks apart and consumers are encouraged to constantly renew their wardrobe What could Salgodon do if they want to be a slow fashion company ? give the customers access to tutorials to repair their clothes design fewer collections In your opinion, is Black Friday a growing phenomenon ? yes, rapidly. In 2018, Black Friday generated $6,2 billion in online sales in the US alone, a growth of 23.6% from the previous year. 5 Product-service system Do you know what the product-service system is ? It is an innovative business model in which products are not sold, but rather only their use, sometimes through a business model based on subscriptions. What are the benefits of the product-service system ? The product-service system allows to : reduce resources needed; tackle planned obsolescence; limit overconsumption; And the customer: can afford to use good quality products for a precise need; does not have to worry about maintenance; With companies like Rent the Runway, consumers : do not have to care about repairing their clothing enjoy high quality clothing Rent the Runway's business model is good for the environment because : the lifespan of clothing is extended clothing does not just sit in the closet when the owner does not wear it anynome Rent the Runway invented a new way to sell fashion in 2009 but their business is just reaching the break-even point. According to you, what were the main difficulties ? logistics finding the right offer convincing reknown luxury brands Some big companies are already into the product-service system. Do you know which one ? Michelin 6 Liberated companies Do you know what intrapreneurship is ? Intrapreneurship is the act of behaving like an entrepreneur while working within a corporation. The action, usually undertaken by a few motivated employees, often leads to positive outcomes for the company but also for society. We can then talk of social intrapreneurship 27% of Europeans declare they are engaged in their work and committed to their company. In a liberated company, the hierarchy is :horizontal The organisation may not be totally horizontal, as projects need people to lead them. However, the role of the leaders is more to help their colleagues if needed and give a direction to the team, rather than controlling the work done by others. In a liberated company, it is quite frequent to see : a simplified control process employees involved in the planning of the annual budget groups of employees autonomously managing major projects To put a liberated company strategy in place, one must have a strong corporate culture. W.L.Gore employees are not called employees. In your opinion, what term is used instead ? associates W.L. Gore R&D strategy relies on : how popular projects are amongst associates Information Systems and digital tools are often central in liberated companies. Why in your opinion ? they are great tools to distribute the power of decision they allow employees to be more autonomous 7 Setting a new purpose for companies Do you know the Business Roundtable ? The Business Roundtable (BRT) is an American non-profit association whose aim is to promote public policies in favour of businesses. Founded in 1972, BRT members are not companies but CEOs. Their first actions were against anti-trust laws and against pro-worker labour laws. They considered that shareholder interests must be placed above all else. In 2019, they gave a new definition of the corporation in tune with the times. The group said companies must advance the interests of all stakeholders. They should invest in their employees, protect the environment and deal fairly and ethically with their suppliers. Why for-profit companies are considering stakeholders more ? The stakeholder theory is a view of capitalism that stresses the interconnected relationships between a business and its customers, suppliers, employees, investors, communities and others who have a stake in the organization. That view is in opposition to the long-held shareholder theory proposed by economist Milton Friedman that in capitalism, the only stakeholders a company should care about are its shareholders - and thus, its bottom line. First theorised by Edward Freeman in the 1980s, the stakeholder theory is growing in popularity and used as an answer to XXIst century issues. Around 75% of Western Europeans have changed their consumption habits in order to lessen their negative impact on society and the environment. In the US, before the benefit corporation status existed, for-profit companies could only have one legal rationale : maximise their financial value Partly inspired by the American benefit corporation model, French companies have the possibility to add a mission to their legal status since 2020. The first country in Europe to pass legislation recognising socially involved for-profit organisations is also where the slow-food movement was created. This country is Italy Tick all the B Corp companies : Ben & Jerry's Danone Patagonia Chapter II : social inequalities and market approach 8 Let's rethink our market approach How is the poverty threshold calculated in the EU ? it is set at 60% of the national median income after social transfers In your opinion, what is the difference between the lowest and the highest poverty threshold in the EU ? €1210.It is the difference between the poverty threshold in Luxembourg (€1475/month for a person living alone) and in Romania (€265/month for a person living alone) The poverty rate in EU countries ranges from 11% to: 25% financial exclusion? It is a situation in which someone does not have access to all the minimum banking services guaranteed by the law. What are some of the possible reasons that Emilie is unable to obtain a checkbook or a bank card ? she doesn't have sufficient funds to open a bank account there is no banking agency in the area where she lives In your opinion, how many Europeans do not benefit from basic banking services provided in their country ? more than 100 million Who are Nickel customers ? everyone Nickel's main innovation is the way financial services are distributed . Mid-2017, Nickel was bought by BNP Paribas. Why in your opinion ? because adressing excluded people's need represents a real business 9 Address low income customers more effectively In the world, there are approximately 5 billion people living with less than 10 dollars a day. The mismatch between the products and services and the needs of low income populations is specific to the banking industry. false. Big companies rarely address the needs of the poor. C.K Pralahad and Stuart L. Hart estimated that companies usually target the 800 000 million richest people on the planet. What does BoP stand for ? Bottom of the Pyramid BoP consumers : usually prefer products from well-known brands consider customer service essential consider the financial risk as something important when purchasing a good To sum it all up, the BoP theory aims to: design products and services adapted to lower income populations reduce poverty 10 How to reach BoP (Bottom of the Pyramid) populations What is the average non take-up rate in most Western Europe countries ? more than 50%. Unfortunately, non take-up of public provisions is a serious problem in contemporary welfare states. In many Western European countries, more than half of those eligible for social assistance do not receive it. Why do you think non take-up is so common ? personal decision not to claim benefits lack of awareness What is the mission of Voisin Malin representatives ? to help big organisations understand and reach people living in disadvantaged urban areas to help their neighbours solve their administrative issues Voisin Malin receives subsidies because : they do social R&D. Their action can be considered as social R&D that benefit the public. Their findings are of interest for public and private organisations to help them better understand their audience. How does Voisin Malin stay a trustful organisation in the mind of their audience ? because they directly concern individual interest because they make sure they always act in the interest of their audience In order to address BoP populations' needs more effectively, big companies have to : better understand what these needs are thanks to on-ground intermediaries have a specific communication plan 11 Having lower income can make you pay more Not having access to an adapted offer often implies more costs for the same service. What kind of offer could BoP populations have access to in order to reduce their expenses ? better access to standard necessary products and services products and services that are not cheaper but that are adapted to their needs Poverty penalty applies to housing because : heating bills are higher in low-income housing units the smaller the surface area, the higher the price per square meter Poverty penalty exists because : people with low income are considered as high risk profiles unit price is higher if goods are bought in small quantities To avoid poverty penalty, a company can : put in place a tariff grid calculated according to the customers' income design products and services adapted to the needs of BoP populations To sum it all up, people who are in a delicate financial situation often have to pay more than the average consumer for the same service. 12 The value for money in BoP projects A low-cost product : can be socially depreciating costs less to produce and is sold at a lower price has a shorter lifespan In order to offer good quality products at affordable prices, a company can : recycle untapped resources try to identify people or organisations who indirectly benefit from their product/service When is a household considered to suffer from fuel poverty ? It is not easy to give a universal definition of fuel poverty. It depends on a country's climate as well as its risk-of-poverty-rate. To measure fuel poverty, Eurostat simply asked people if they could afford to keep their home adequately heated. In Europe, 30 million people claimed that they couldn't afford to keep their home adequately heated. How did DORéMi manage to offer a better service at a lower price ? by refusing to sell low-cost services by thinking about the construction ecosystem as a whole It's important to analyse the link between digital transformation and ecological transition. Can you guess why ? some digital innovations can consume a lot of energy digital technologies can help manage the use of energy more efficiently 13 Brands and BoP (Bottom of the Pyramid) customers What kind of products do BoP populations like the most ? Neither low-cost products or brand name products What are the main benefits of solar lamps ? the maintenance and usage cost the impact on health and the environment they are more powerful than kerosene This solar lamp program has been deployed by Total in 30 emerging countries. Globally, 10 million people have been impacted. In your opinion, who is in charge of developing this project at Total ? an internal incubator which aims to support social business projects Why have Total solar lamps been such a success ? because of the reputation of the Total brand thanks to Total's dense distribution network of stations network Chapter III : The new consumption patterns 14 New consumption patterns Ethical consumption can imply : choosing local and seasonal food refusing to buy products that are harmful for the environment Are Europeans ready to change their consumption habits ? A study carried out in 6 different countries in Europe (France, Sweden, Germany, the UK, Italy and Spain) revealed that 74% of consumers have changed their consumption habits in order to have a less negative impact. Out of the 74%, 15% have completely changed their habits and 59% have partially changed. If a company pays attention to ethical consumption trends and social innovation, they will be able to : shape a global CSR strategy anticipate the weak signals of tomorrow's trends have loyal customers without spending too much money on marketing Which elements are required to obtain the organic label ? chemical inputs are not to be used the farm must be under regular scrutiny Do you know how much money is generated on the organic market in the EU ? The organic market amounted to 32 billion euros in the EU in 2016, which is 10 billion more than in 2012 (Source: report le bio dans l'UE from l'Agence Bio, 2017). The distribution of market shares is quite uneven between countries. The biggest producers are in the south of Europe, while the biggest consumers are in the north. In theory, organic farming could be able to feed the 9.5 billion people living on earth by 2050. According to a study, organic farming is More profitable than conventional farming. Among Nickel's clients, what proportion lives under the poverty threshold ? around 50% It is a high proportion of clients living under the poverty threshold. This figure proves financial exclusion needed to be addressed. 15 Short food supply chains What is the core aspect of short food supply chains ? the number of intermediaries Short supply chains can be found in many sectors. Can you guess the total distance covered by the ingredients in an industrial fruit flavoured yoghurt ? 9115 km. Such a distance can be explained by the number of intermediaries and locations needed to gather the ingredients, transform them, package them and bring them to the final retailer. (source: "L'agriculture mondialisée" by Jean-Paul Charvet) In the EU, 15% of farms sell more than half of what they produce through SFSC. According to you, at which phase of the food chain most greenhouse gas (GHG) emissions are produced ? during the production. Production represents 57% of GHG emissions while transport "only" represents 17%. What would be particularly important in order to set up an SFSC ? the opportunity for the consumer to meet the producer the use of digital technologies 16 The food cooperative model Short Food Supply Chains (or SFSC): Distribution network in which there is no more than one intermediary between the producer and the consumer.In order to consume in a more authentic way, the aim is also to reduce the geographical distance between the producer and consumer. Food cooperatives : boost the local economy hire few employees need a strong and committed community to exist enhance social links in the area where they are based The most innovative aspect of The People's Supermarket is : the versatile role of the customer who is also a volunteer worker and a stakeholder low prices What are the benefits of food cooperatives for their members ? a total transparency on how the business is run cheap products adapted to their needs What is the principal advantage of the cooperative model for supermarkets ? low operational costs Currently, the Park Slope Food Coop in Brooklyn is one of the most profitable supermarkets in the US. profitable : Thanks to all the savings in management and logistics and because of the commitment of their members, they are one of the most profitable supermarkets in the US ($57 million in revenue in 2017). 17 Food waste Worldwide, greenhouse gas emissions due to food waste are approximately equivalent to those of : India (3.1 billion tons of CO2 per year) Among the following suggestions, which one contributes the most to food waste in Europe ? households Households contribute to 53% of total food waste in the EU. In the EU, the food waste in households amounts to 90kg per person and per year. Could you guess the cost of food waste for the average European ? In the EU, food waste has an estimated cost of 300€ per person per year if we consider the whole food supply chain and 200€ if we only consider the food the consumer actually bought. The success of PHENIX is based on : their logistic expertise their network of partners their win-win solution With the food saved from the bin by PHENIX since 2014, it would be possible to feed the population of a city the size of Stuttgart or Wroclaw for 1 month . 1 month : Stuttgart and Wroclaw have a population of just over 620 000 and PHENIX has saved the equivalent of 60 million meals since 2014. (60 million meals / (620 000 people x 3 meals a day) = 30 days ) Working with PHENIX allows a company to : reduce their waste management costs reduce their impact on the environment Chapter IV : The silver economy 18 Issues due to an aging population Do you know what falls prevention is ? Falling is a leading cause of accidental death in older people and as the population ages, falls and associated injuries are likely to increase. Over 30% of people aged 65 and over and 50% of people aged 80 and over fall at least once a year. When we consider that there are an estimated 420 000 fatal falls that occur every year, it appears to be a more serious issue than one could imagine. With death as a possible outcome, falling more often causes serious injuries that increase dependence. The elderly need to stay active and work on their balance, strength and flexibility to prevent them from falling. What are the positive outcomes of physical exercise for the elderly ? it reduces their risk of falling public health systems save money Mira's solution is not only used to prevent risk for the elderly. What other uses can it have ? help for physically handicapped people help for mentally handicaped persons rehabilitation after an injury Which public institution uses Mira ? the NHS (the British healthcare system) Do you know what social R&D is ? Social Research & Development is a practice used by organisation, of experimenting with new solutions that address social issues. This kind of research can be subsidised as it helps public institutions conceive new policies. What about hybrid business models ? They enable an impactful structure to balance off their non-profit activity with a lucrative one. It is quite common in the field of social economy. An organization such as Siel Bleu can be funded thanks to : direct and indirect beneficiaries Having several structures allow Siel Bleu to : finance non-lucrative activities offer lower prices to the people who couldn't otherwise afford the sessions improve their social impact 19 Preventing dependency How many people are over 65 years old among the 512 million residents of the EU ? 100 million What is the Silver Economy ? The silver economy is a phenomenon related to the aging of the population. It affects all sectors of the economy and brings up new market opportunities and new challenges for society as a whole. Living longer is one thing, living a good life as a senior is another. The silver economy is expected to contribute over €5,7 trillion to Europe's economy in 2025. In your opinion, who delivers most of the care services in the EU ? informal caregivers including family, friends or neighbours What issues do caregivers face ? there is a lot of involuntary part-time or undeclared work over time, the job has become less humane Digital tools are the right solution to the issue of an aging population. false. In 2018, for the first time, the UK's prime minister appointed a Secretary of State for loneliness. How could home automation help the elderly ? with physical daily tasks that they are no longer able to do with reminders In your opinion, unlike the "rationalised" home care industry, Buurtzorg employees : know their customers and thus need less time to heal their patients are in charge of less patients but are able to identify their needs more efficiently Buurtzorg's model does not only positively affect caregivers and their patients, it also has a great impact on patients' families . 20 Cognitive impairment, a major challenge Can you guess how many people will suffer from Alzheimer's in the world in 2050 ? (50 million in 2019) 152 million people. This number constantly rises because of the global increase in lifespan. In 2019, there were about 50 million people diagnosed with Alzheimer's worldwide. In the United States, one out of three seniors die from Alzheimer’s, or another form of dementia. An early diagnosis of Alzheimer's disease can : help science slow the disease allow the patient to make their own decisions about their future What makes Altoida's solution innovative : it takes the diagnosis out of the hospital it uses technology to diagnose dementia it enables an early diagnosis A stay at the hospital is usually bad for an elderly's mental health. Altoida's solution makes it possible to : anticipate the amount of people that will get a mental disorder in the future send less people to the hospital Chapter V : Impact Investing 21 A milestone in the evolution of the banking industry : the microcredit Do you know what microcredit is ? Developed by Nobel Peace Prize winner Mohammed Yunus in the 1970's, it is a financing service in which very small loans are granted to people who do not have regular access to banking services. This mostly occurs in developing countries. These loans are often necessary to launch small businesses and generate future revenue. In the microcredit sector, interest rates are generally higher than more traditional credits because : operational costs are higher microcredit institutions themselves have to borrow some money before they lend it Grameen Bank is a key actor in the microcredit sector, because : interest rates stay reasonable in the microcredit sector the loan is awarded only after making sure the lender will be able to pay it back Worldwide, more than €100 billion is currently borrowed through microcredit. €100 billion: €114 billion were borrowed thanks to microcredit institutions worldwide in 2018, which is equal to Ukraine's GDP. Do you know what inclusive business is ? Inclusive business encompasses all business strategies that aim to have a positive impact and include people with low income, be they consumers, producers or retailers. What is the interest for Bel to set an inclusive business with street vendors ? be extremely quick to develop a new offer reach a new audience Why is it in the interest of a big company like Bel to partner with local actors working on the ground for their inclusive business strategy ? they can better reach their target audience and communicate the benefits it can help them understand how informal distribution networks are organised 22 Impact Investing Could you guess approximately the total value of all SRI investments worldwide ? $30 700 billion in 2018 ($18 270 billion in 2014) SRI are designed to make profit. are: SRI are usually started with non financial motives, but more and more, they are dealing with competitive products for investors with return rates comparable to other products. What are the limits of SRI ? there is no clear typologie there is no independent third-party certification required' The aim of impact investing is : to have a positive impact on society go beyond CSR Which of these elements is essential for impact investing funds ? being able to measure precisely the impact of projects Do you know what green bonds are ? These bonds, also called climate bonds, are used to fund environmental projects (renewable energy, sustainable farming, innovative mobility solutions, etc.). They can be emitted by companies or public institutions. Some stock exchanges are specifically dedicated to companies with a positive social and/or environmental impact : true As an example, we could mention the London Social Stock Exchange that provides a database of companies who have passed a rigorous “social impact test”, while at the same time act as a research resource for would-be social investors. 23 What about the role of the State ? Since 2010, 441 million euros have been raised thanks to SIB. What are the advantages of Social Impact Bonds ? they allow the State to save money private investors have a financial interest in reaching social impact goals Social Impact Bonds (SIB) are sometimes criticised because : they can be seen as a means to reduce costs rather than having a better impact social impact indicators do not necessarily make sense for all parties Measuring a project's social impact is important : improve processes in order to find investors to redefine a company's strategy With which of the following methods can we measure social impact? the Social Return on Investment (SROI) cost based methods (damage costs avoided, replacement costs and substitution costs) A/B testing What is the major issue of cost based methods ? the qualitative aspect can be neglected 24 Getting financed thanks to digital technologies Does the collaborative economy sound familiar to you ? It is a type of economy that relies on pooling, sharing and exchanging services, resources, ideas, knowledge and skills. There are many popular examples : crowdfunding, carpooling, lending objects, offering services, etc. Crowdfunding allows : people who do not have a good network or financial guarantees to have access to funding non profitable projects to receive funds There are no specific requirements for a crowdfunding campaign to succeed. false People who give money on crowdfunding platforms are not always professionals investors. They will look for projects that speak to them. Crowdfunded projects are often cultural or socially engaged and need a good communication. Which type of crowdfunding is the most popular in Europe ? In 2017, the European crowdfunding market amounted to €10 billion among which : 80% in crowdlending ; 14% in crowdequity ; 6% in donation. The UK is by far the most active country in Europe and was responsible for 70% of this amount. What are crowdequity benefits compared to traditional private equity ? there are less difficulties than with banks and institutional investors investors are also real ambassadors for the project Crowdlending is particularly popular for SME. SME: Most loans to businesses are less than €1 million and go to SME. In the funding process, digital technologies allow to : bypass classic institutions bring together many small investors around the same project