For Marcos Vaz, head of sustainability at Natura, also part of ISE, connecting companies with wider society is the way to get solid and long-term results. “We believe in the importance of mobilizing civil society to create an atmosphere for sustainable entrepreneurship. It is key to develop a model that achieves economic growth, social development and a sensible use of natural resources,” he told us.
In this area, the market has had to sprint to adapt to new conditions and to create alternatives that meet new demands, without losing its entrepreneurial focus. This is what Leonardo Letelier proposes. With experience in strategic consultancy, Leonardo founded sitawi, a fund using loans to fund profitable social enterprises at interest rates well below market prices.
“The idea came about when I realized that things couldn’t be solved with capital alone. Just advice was barely enough either. The strategy was to connect capital and strategic advice to allow these organizations to succeed,” explained the president and CEO of the fund. “We understood that there was much more money available in the credit market than in the donation market. If the credit was available to NGO’s, they would have much greater social impact.”
sitawi’s initiative is to raise funds with corporations interested in investing in socio-environmental projects, setting up what Letelier has christened Social Loans. According to the CEO, the aim of the fund, a non-profit organization, is to create social impact and present companies with a safe way of investing in sustainability.
“Our focus is social impact with a business mind-set and strategic planning”, summarized the founder of sitawi and he emphasized the ever-increasing ability of the consumer to tell the real uses of investments: “This sector has been evolving under pressure by consumers who are better at working out what is just talk and what is actually happening. It’s like a wave: first you see the foam and everything’s moving, but it’s only when the foam disappears that the more mature and really sustainable projects appear.”
Innovation in the Third Sector
In the same way that the market has had to readapt itself, the Third Sector—non-profit organizations and NGO’s with an aim to create services for the public—needs to include business language, in order to persuade investors to contribute financially, explains Emilio Andreozzi, manager of the NGO Caspiedade in São Paulo: “The Third Sector is going through a process of professionalization. Even the terminology used comes from the professional world, which means greater credibility and learning a language much closer to the Second Sector’s.”
Andreozzi adds that the business idea of making a return is beginning to be seen in organizations. The pursuit of results, or rather successfully putting sustainability projects in place, has meant that the third sector is more than just theory and the maths has seen advances in socio-environmental matters. In order for an NGO to work today, it has to invest in accounting. There’s already a growing trend for corporations to look to the third sector for assistance and advice in their own social projects and to look for partnerships as well,” he adds.
According to Andreozzi, with communications media and market indicators, they have managed—albeit timidly—to transform their mind-set and take social work from being just about charity, to being able to show results and social indicators for the areas where they work. “The pressure for funds is good for the market, as it pushes sustainability projects and technology developments to plan for the future. It’s not just ideology,” concludes the investor, Carlos Martins.