Many businesses have adopted a Corporate Social Responsibility (CSR) programme as a core strategy to improve returns. In the CSR lecture, we have stressed on using corporate sustainability as a competitive advantage. CSR can also be refer to social finance.
Social finance establishes a new medium of capital market, which have traditionally been dominated by declining government, non-profit, and charitable work. An example of this type of CSR initiative is Royal Bank of Canada’s impact investment fund. On January of 2012, RBC have invested 10 million capital fund which would be used to finance solutions to social and environmental challenges while at the same time generating financial return. Its priority include promoting environmental sustainability and water resource management. Investors are willing to expect a lower financial return in exchange for social benefit (there are cases where financial returns are just as high as alternatives). RBC expects a lot of incoming capital and the RBC President and CEO actually believes they would face the challenge of “having more capital available than opportunities.”
Sources
RBC Impact Fund Breaks New Ground in Canadian Banking Sector
Corporate Canada begins the search for (social) returns
Why is RBC banking on social finance?
