There is just so many times one can google, 'CSR', 'CR', 'CSV', ‘SRI’, ‘ESG’ or ‘impact investing' and get a new definition, taxonomy or methodology before you wonder if someone is intentionally trying to confuse us. As the ironic expression goes: one should eschew obfuscation.
It is with a sense of consternation that we attempt to reconcile the shifts in letters - or even just attempt to trace back where and when a term took on different meanings. Sometimes it’s a geographic (or even country) preference and other times it’s a power struggle between organisations vyingfor thought-leadership. The followers are scrambling behind and forming camps. Yet it seems obvious that in building the impact economy, divide and conquer is not a suitable strategy!
Imagine ‘No War!' chants that argue we should add ‘World’ or shift to 'Battle' or 'Fight' based on personal preferences. You get the point, but who doesn’t want a neat slogan to chant? Not possible in our space - you’ll end up being interviewed why you used one term over an other and end up in a lengthy academic discussion on etymology.
It’s hard to get on a soap box demanding change and improvements when you have to add caveats, parentheses and footnotes to your cause. S*(R)(i)I = S stands for sustainable and/or social, R (optional) is for Responsible, little I for ‘impact’ and the big I for Investing.
As advocates of the #ImpactImperative, it is a remarkable burden and even a shame to not find a common language in championing the positive change in business and finance.
CSR lost an S and then added a V. First, more organizations began adopting ‘CorporateResponsibility teams’ to stress that they were above and beyond ‘Social’. Then, this CSR 2.0 was revamped into Creating Shared Values (CSV) as version 3.0. But at the end of the day it’s businesses recognising they have more than profit to look after.
Which brings us to the investment space. USSIF and their European colleagues made a clear case for SRI Investing for sustainable, responsible and impact investing. It’s simple and works. But we note that the EU categorically dropped the ‘R’ altogether and are sticking to clean ‘Sustainable Investing’. It’s simple and works... But come on, people - we are trying to start a global movement - can’t we agree on what we are fighting for without demarking our own little fiefdoms?
The only thing that’s clear is that Social is being systematically replaced by Sustainable. Fair enough. But then there’s a strong push-back that sustainability is too closely associated with environmental issues exclusively… and that with all the attention on climate change (thank heavens), we need to re-insert the SOCIAL. They two are intrinsically linked and not in any way contradictory. See this story: https://www.weforum.org/agenda/2019/01/income-inequality-is-bad-climate-change-action/.
Check out our previous article that picks up on this as well: People and Planet - like Human Rights - isn’t a zero sum game.
Let’s heed a dire warning given from Wendy Abt: “Impact investing has never been more popular nor more in peril. The field is wracked by confusion over basic principles, dubious practices that invite cynicism, and biases against large companies. If more clarity is not brought to the movement, it risks a hard fall.”
It would be better to adopt a KISS (Keep it Simple Stupid) approach to this. We realize that everyone will continue on their path as before. With this article (and in our daily interactions), we try to lift ourselves and others out of the alphabet soup. Just remember: everything we do is driven by the recognition that each of us has an impact on the world. We strive to create positive change around us and to reduce the negative impact of past exploitative practices. After that, it’s just semantics.
P.S. Don’t let us start on the ‘May a 1000 Flowers Bloom’ approach people have on impact measurement tools - that’s another article!