Annual Report 2021

Special Features

Social innovation

As demand grows for more effective, sustainable and equitable solutions to the world’s diverse and complex social, economic and environmental challenges, in 2021, IMD accelerated its investment in the rapidly-emerging area of social innovation.

Guided by the work of Professor Vanina Farber and her growing team at the elea Center for Social Innovation, IMD has established itself as an academic leader in exploring how private capital can be deployed to deliver positive impact through ESG, impact investing, innovative financing, market building and scalable social enterprises.

“We are looking into how we can address social and environmental problems more efficiently and effectively than the market has been doing or was doing in the past,” Professor Farber said.

In line with its purpose to develop leaders who transform organizations and contribute to society, IMD’s strategic commitment to social innovation was further underlined in 2021, with Farber’s appointment as the Dean of the EMBA program and the addition of three elea Senior Fellows.

Leading the way

According to BlackRock CEO and Chairman Larry Fink, the next 1,000 unicorns – companies worth more than $1 billion - will be in climate technologies. What was once a fringe business is now a big investment opportunity that serves the dual purpose of addressing climate change while also driving prosperity.

In fact, while not all social innovation is profit-driven, many successful social enterprises are now maturing to the stage where they can transform industries and attract significant investment, either through funds, venture capitalists or corporate acquisitions.

At the same time, traditional investment funds are establishing vehicles around ESG and impact, and putting pressure on companies to show measurable impact.

This is creating unprecedented demand for education and research to help executives and organizations navigate an unfamiliar landscape where risk, reward and impact need to be assessed, understood and balanced with appropriate solutions.

“We have moved from the broader understanding or the intention segment of the purpose phase to realizing that, in practice, we have very specific challenges that are very technical and require a cross section of skills – skills that many companies don’t have,” said Farber, co-author of The elea Way: A learning journey toward social impact.

“It is now a field that is professionalizing, on the corporate and the investor side – that requires new skillsets at the corporate and investor level,” she added.

In response, IMD is offering pioneering learning experiences and thought leadership that challenge mindsets, equip executives with the tools required to master the social enterprise and impact investing ecosystem, and help companies transform for social impact.

This ranges from impact investment modules and discovery expeditions in its degree programs to exploring ESG investing trends, the impact investment spectrum, and bespoke finance solutions for investors and social enterprises in research. The elea webinar series “Mobilizing private capital to spark social innovation”, featuring diverse impact actors and themes, raised the profile of the center’s work and fostered a global community for knowledge sharing and exchange during the pandemic.

“Our mission is to challenge what is and inspire what could be, challenging the status quo and corporate business models,” Farber explained. “If we want to live our mission and vision, we need to be thought leaders in this field. So, how can we continue to bring innovative tools and push the boundaries?”

Vanina Farber

“How can we align the different incentives among players with a common purpose or intentionality to finance and scale up solutions?”
Professor of Social Innovation Vanina Farber

Pioneering research

In addition to Research Fellow Patrick Reichert, an award-winning expert in the different approaches that investors use to finance impact, the elea Center recruited three Senior Fellows in 2021 to diversify its research into the impact economy.

  • Katherine Milligan, Director of the Collective Change Lab, will investigate how to create a new, more holistic frame for social entrepreneurship beyond the current limited scope of solving individual social problems.
  • Maximilian Martin, author of Building the Impact Economy, will conduct research to help business leaders navigate and embrace the emerging new order of business, finance and impact investing.
  • María Helena Jaén, Honorary Professor at the Universidad de Los Andes, International Professor at IESA and Adjunct Professor at the Miami Herbert Business School, will produce teaching cases and educational content on the economic, social and environmental impact of social entrepreneurs.

EMBAs discover impact investing in Peru
EMBAs discover impact investing in Peru

Innovative learning experiences

EMBA and MBA participants at IMD are offered the chance to learn about impact investing, ESG and social enterprises through modules that cover theory and practice, featuring presentations from investors, emerging market experts, activists and social entrepreneurs.

To challenge their perspectives, for example, EMBA module projects are subjected to honest critique by young social and environmental activists, while a Discovery Expedition to Peru immerses participants in a “due diligence” fact-finding mission about social enterprises before making recommendations to impact investors.

What is social innovation?

Social innovation creates new solutions (products, services, markets, models, processes) to the benefit of global society by addressing social and environmental needs more efficiently and effectively than current policies and businesses.

To read more about the elea Center for Social Innovation’s work in 2021, please click here.

What is social innovation