The Impact World this Week: 27 September 2024
Your quick guide to the most interesting news snippets about social enterprise, impact investment and mission-driven business around the world from the Pioneers Post team. This week: UN makes sustainability pledge, Open AI plans to adopt for-profit structure, TikTok backs social economy, and more.
CEO Sam Altman co-founded Open AI as a non-profit entity in 2015. © World Economic Forum / Benedikt von Loebell
Global: ChatGPT-maker OpenAI plans to restructure its core business into a for-profit benefit corporation that will no longer be controlled by its non-profit board, reported Reuters on Thursday. Reuters’ reporting said the new structure of OpenAI would resemble that of Elon Musk's xAI, which is registered as a benefit corporation – a legal structure in the US that gives businesses particular obligations when it comes to purpose, accountability and transparency. The Guardian reports that the firm aims to attract US$6.5bn of new funding. The reports of the planned restructure come as a number of senior staff announced their departure from the firm. OpenAI was founded as a non-profit in 2015 and four years later added a for-profit subsidiary in which Microsoft is the biggest investor. The OpenAI non-profit will continue to exist and own a minority stake in the for-profit company, according to Reuters’ anonymous source.
Global: Developing ‘measures beyond GDP’ and safeguarding the needs of future generations are now UN priorities after a vote at the organisation’s General Assembly on Sunday. The 193-member UN General Assembly, taking place in New York, voted to adopt the Pact for the Future, which also includes pledges to move faster towards achieving the UN’s Sustainable Development Goals and the Paris Agreement commitments on climate change. Elements of the pact have been compared to concepts such as Kate Raworth’s Doughnut Economics, which similarly make the link between economic systems change and sustainability.
- Read more in our Pioneer interview: Kate Raworth - We’re going to redefine business
Global: From regenerative seaweed farming in the Philippines to low-carbon, earthquake-resistant bricks in Nepal, 15 innovative solutions to climate and environmental challenges were announced as 2024 Earthshot Prize finalists on Tuesday. The five winners of the prize will be revealed in Cape Town in November. Winners will receive £1m each and the prize organisers say it has helped unlock more than £75m in direct and in-kind support for finalists since it was founded by the Prince of Wales in 2020.
Global: TikTok, Renault and Zurich Insurance are three of 11 latest organisations to pledge to address the estimated US$1.125tn funding gap that social enterprises face worldwide. The 11 organisations signed the Schwab Foundation’s Rise Ahead Pledge this week, joining 13 companies which signed at the launch in January 2024. By endorsing the pledge, companies collectively aim to increase their engagement in social innovation and significantly bolster the social economy by 2030, in line with the UN Sustainable Development Goals. The signatories have committed to creating collective quantitative targets for their activities in time for the World Economic Forum Annual Meeting 2025 in Davos.
Global: The Miller Center for Social Entrepreneurship has pledged to raise and invest US$20m with the aim to catalyse US$200m in funding for social enterprises around the world by 2030. The plan, called the Clinton Global Initiative Commitment to Action, will support social enterprises addressing poverty and climate resilience. According to the World Economic Forum, social enterprises globally face a US$1.1tn “funding gap” which limits their ability to grow and create more impact, with only 5% surviving beyond a decade.
Global: The International Foundation for Valuing Impacts (IFVI) and the Value Balancing Alliance (VBA) are calling for public feedback on three draft impact reporting methodologies recently published: one focusing on occupational health and safety, one looking at water consumption and a third looking more generally at impact measurement and valuation. The IFVI is leading the development of “impact weighted accounts”, an impact measurement approach that aims to put a monetary value on social and environmental impacts, to enable corporates and investors to report on their impact in a similar way to how they report on their accounts. Existing impact measurement standards have recently been criticised as an unreasonable burden for small enterprises.
Movers and Shakers
- Elizabeth Boggs Davidsen will join GSG Impact as its new CEO on 7 October, replacing Cliff Prior. She currently leads the Office of Development Policy at the US International Development Finance Corporation.
In case you missed it
France: French investment firms are increasingly making large-scale investments in impact businesses, with the number of funders ready to invest €3m or more in mission-led enterprises growing threefold in the past three years, according to Mouvement Impact France’s latest mapping of the sector. The research identified 128 “impact funders” (investment firms making some investments in impact-led businesses) in the French financial landscape, twice as many as there were three years ago when the organisation published its first study of the market. Mouvement Impact France has also launched an online platform intended to help impact entrepreneurs identify which investors better suit their needs.
