Make good use of corporate ethics to draw a blueprint for governance and accountability for social innovation organizations

As investors pay more and more attention to ESG—​Environment (environment), Social (society), and Governance (corporate governance), companies are driven to more actively adjust all aspects of economic activities, from the past preference for cost performance, delivery, and budget to the present Pay more attention to the source of raw materials, health and safety, the impact of production lines on the environment and related stakeholders. Gradually, more and more enterprises pay attention to the embodiment of corporate ethics in economic activities. However, there is still a gap between “knowing” and “doing”. In order to support organizations in establishing corporate ethics and strengthening their operating systems, Social Enterprise Stream, together with Xinyi Housing and Xinyi Cultural Foundation, launched the “Entrepreneurship is moving, ethics must be— —Small and Micro Enterprises Ethics Development Course” plan, respectively planning training courses in terms of economy, society, and environment, to help organizational leaders better understand the spirit of corporate ethics, and then be able to lead the organization to exert social influence. In the three economic courses, Chen Yiqiang, General Manager of Living Water Impact Investment, Huang Huimin, Secretary-General of B-type Enterprise Association, and Lin Yihan, CEO of Social Enterprise Stream, were invited to discuss the knowledge and practical application of corporate ethics on the economic level.

Applying the “ABC” principle, taking into account both organizational profitability and social responsibility

Thirty years ago, companies first pursued profitability, and social responsibility was not a priority in economic activities; as discussions on sustainable development and corporate social responsibility (CSR) became increasingly popular, and investors paid more and more attention to corporate ESG influence, how should companies balance profits and Making a social impact is a key topic for contemporary companies. There are more and more social innovation and entrepreneurship organizations in the market that use “ESG as the basis to solve social problems”, and established enterprises that have been in operation for many years are gradually responding to this trend, reshaping the spirit of corporate ethics and introducing sustainable development thinking within the organization. “Social innovation and corporate ethics, the interaction between the two produces social influence.” Chen Yiqiang, general manager of Living Water Impact Investment, shared in the class that social innovation organizations want to implement corporate ethics in economic activities. Thinking towards action—Act to avoid harm (avoid harm), Benefit Stakeholders (beneficial ecology) and Contribute to the solutions (contribute solution), taking into account organizational profitability and social responsibility as much as possible. In addition, the relationship management between social innovation organizations and partners also highlights the implementation of corporate ethics. Cooperation in the industry is mostly a good thing, but the breakdown of the relationship will lead to the destruction of the corporate brand. “Just imagine, if today’s decision made by the organization becomes tomorrow’s headlines, what will the organization’s stakeholders think?” Chen Yiqiang mentioned that the key to sustaining cooperation and avoiding a breakup lies in two: consistency in appearance and inside, and instant notification. Treat partners with an open and honest attitude. If the organization encounters difficulties or difficult situations, you should immediately inform the partners, stop losses in due course, and discuss countermeasures to avoid the regret of breaking the relationship. Although social innovation and entrepreneurship are still a small group at present, and social influence cannot be seen immediately, Chen Yiqiang specifically mentioned the importance of long-term effects, “The core of social innovation is not to obtain fish or fishing rods, but to change the entire fishery ecology.” Take the time. The axis is elongated, and social innovation can solve current social problems from a structural perspective, and gradually grow from a “key minority” to a “mainstay” in economic activities, and then reverse the entire industry circle and exert a positive impact.

Promoting a good supply chain and making “benefit for all” a reality

In the second class on the economic side, Huang Huimin, secretary-general of the B-type Enterprise Association, shared the connotation and practice of a good supply chain. She mentioned that the traditional process of selecting suppliers emphasizes the priority of “price”, such as cost, delivery date, quality, etc.; the selection process of a good supply chain pays more attention to “value” orientation, such as environmental costs and the safety of raw material sources Wait. Good supply chains are becoming more and more popular, which is related to the interaction between consumers, enterprises and suppliers. Consumer purchasing preferences can drive companies to adjust the supplier selection process. Good suppliers are recognized by the market, which in turn promotes the transformation of traditional suppliers. In addition, companies can also take the initiative to change the supplier selection process, thereby driving consumers to establish the purchase concept of “good suppliers and related products first”. For example, corporate brands launch toilet paper made of environmentally friendly pulp to encourage consumers to consciously choose environmentally friendly products. Once the products are recognized by the market, other suppliers will also be willing to provide high-value raw materials. Although the concept of a good supply chain allows companies to practice ESG and corporate ethics in economic activities, comprehensive application is not easy. Generally, traditional enterprises may be constrained by contracts and risk management and cannot immediately change the business selection process. In this regard, Huang Huimin suggested to start with the internal training of the organization, so that members of the organization can understand the connotation of a good supply chain, and then adjust strategies and actions. “The transformation of the business selection process is like a learning process. After inspiration, change, and finally into practical actions, it becomes a force to make the world better.” Huang Huimin mentioned that if the current supply chain of a company is not in line with ESG, it cannot be implemented overnight. To overthrow, instead, it takes one step at a time to slowly practice the ideal of “benefit for all, be the change”.  

Do you hate less when ESG is used? Self-discipline and heteronomy of small and micro enterprises

Talking about the connotation of self-discipline and heteronomy of enterprises is relatively abstract, and it is usually not the first priority pursued by enterprises. However, if guidelines and regulations are indeed established, the growth of the organization will be smoother. Lin Yihan, CEO of Social Enterprise Stream, shared the connotation and application of organizational self-discipline, heteronomy and ESG spirit in the third economic course. Corporate self-discipline refers to internal self-management, such as organizational culture and brand beliefs; heteronomy refers to the display of legal compliance, such as company systems that comply with the Company Law and Labor Standards Law. Lin Yihan mentioned that ESG is not only the key to large enterprises being favored by investors, but also one of the consideration frameworks for cooperation between many enterprises and social innovation organizations in recent years. For example, a listed company, Financial Holdings, disclosed its criteria for selecting suppliers, using ESG as the framework, and listed dozens of evaluation criteria. When a social innovation organization intends to become a supplier of a large enterprise, how to prove that it meets the evaluation criteria is the key to successful cooperation. Lin Yihan encourages social innovation organizations to be prepared to avoid the dilemma of “when ESG is used, one hates less”. As for the establishment of enterprise systems, there is no unified standard on the level of self-discipline and heteronomy. Lin Yihan suggested that enterprises should take ESG 3 as the foundation, self-discipline can refer to the practice of peers as a review standard, observe the projects that have been implemented and have not yet started in the organization, and then make adjustments; other laws can be based on basic company laws, labor standards Legal compliance starts. “With ESG as corporate DNA, small and micro enterprises will grow more smoothly, and their external communication language can be more consistent.” Having perfect self-discipline and heteronomy standards is like having an enterprise growth accelerator, which not only strengthens the corporate physique, but also externally Cooperation and communication can also be smoother. Through the three economic courses, it is expected that enterprises will deepen their understanding of how corporate ethics are implemented in economic activities. For the value proposition of the enterprise, the connotation of social innovation can be introduced to have a positive impact on the market ecology from the structure; the business selection process of the enterprise in the supply chain can be integrated into the ESG 3-oriented spirit, in the hope that a good supply chain will gradually become the mainstream; gradually Improve corporate self-discipline and heterogeneous governance documents to help companies grow more smoothly.