New Capitalism

This transformation has to be led by the CEO with the commitment of all senior management because it is a business opportunity and a competitive advantage.

Measuring and managing impact under a standard model that enables transparency, management and comparability between companies are the big challenges ahead.

The meeting between José María Álvarez-PalleteExecutive Chairman of Telefónica, y Gonzalo GortázarChief Executive Officer of CaixaBankwith Sir Ronald CohenThe President of the  Global Steering Group for Impact Investment (GSG)The panel, moderated by María Herreropartner of TranscendentThe event was an opportunity to discuss the need to redesign a new capitalism, pivoted around social impact.

The debate, which took place in the framework of the VII Ship2B Impact ForumThe debate highlighted the need to redefine capitalism because the system focused solely on maximising profit for the shareholder, which has lasted until today, is broken. During the debate, the strategic importance of impact was emphasised, which represents an opportunity and a competitive advantage that improves the profit and loss account of companies due to its direct impact on financing and on their economic and reputational costs. This not only maximises the positive impact but also limits the negative impact on people's lives and the planet's resources.

During their interventions, they all agreed that "the moment of impact has arrived" and that this transformation towards a capitalism 2.0, based on the social purpose of the company and on social impact, is not merely recommendable but is now essential. They also pointed to the need for CEOs and senior management to lead this transformation and to ground it in the strategic plan, thus reaching all layers of the company.

In fact, companies such as Telefónica and CaixaBank are already working on this, according to their top executives. With bonuses for their managers linked to the achievement of sustainability and social impact variables, promoting impact investment and financing for social entrepreneurs, mobilising assets, connecting millions of lives through cleaner and less polluting fibre optic networks and, above all, transmitting to the entire organisation the need to generate, measure and manage the impact of their operations, products and services.

A process of organisational transformation and cross-cutting mindset that has also been accelerated by the coronavirus pandemic, which has put people more than ever at the centre of financial and business decisions.

The challenges ahead include measuring and managing impact in concrete KPIs because "what cannot be measured cannot be managed", they said. This is the era of transparency of impact.

Therefore, according to María Herrero, partner at Transcendent, it is necessary to "integrate the chip of impact and social purpose into the business model itself and adopt business models that include positive impact in their products and services, so that the more successful the company is in its sales, the more impact it has".

Sir Ronald Cohen recalled during the talk what he reflects in his new book Impact Driving Real ChangeThis is the impact revolution and each of us has a role to play as consumers, employees, savers, employers, investors... We all are and must be part of a new capitalism 2.0 of shared growth and prosperity where no one is left behind.