Theory of Change: Impactful results that change lives

ConsultingTheory of Change: Impactful results that change lives

Theory of Change: Impactful results that change lives

SDGs as a framework for sustainable business innovation

By: Jorge Martínez, Service Designer FUNDES Catalyst and Rafael Enrique Gómez Elías.
2021

It is not enough that companies are concerned about their Corporate Social Responsibility (CSR) within their direct operational activities. They need to go beyond that in order not to limit their capabilities and identify opportunities to develop their business in the long term.

For this reason, it is necessary to ideate and reframe the sustainability strategy of companies to actually impact their operational activities and the environment in which they develop and thus building much more comprehensive and strong relationships between their internal and external stakeholders. Once these priorities are identified, the Sustainable Development Goals (SDGs) could be used as a framework to align strategies and activities with the company’s priorities and enhance operations by identifying new business opportunities and areas for improvement in business processes.

In Mexico and Latin-American, few companies use the SDGs as strategic leverage for their business model, mainly because they don’t see an immediate profit from doing this. This short-term vision limits the growth opportunities for the company in the long run and restricts their ability to adapt to the market. By using the SDGs as a central axis to reframe their approach, companies could build up their adaptability potential, strengthening their business strategy while generating added value for their consumers and forming strategic alliances that contribute to the long-term operation of the company.

 

Aligning the SDGs with the Core Business objectives

Aligning the SDGs to the company’s sustainability model effectively implies an understanding of the market and the integration of these elements into business practices in order to provide the greatest possible value to consumers in the most responsible way. In other words, it is about approaching business activities with an outside-in perspective that considers the business model and responsible added value to the consumer. At the same time, it is about ceasing CSR actions related to trends or theories of sustainability in which the company does not and will not have direct influence.

Taking this approach will increase the company’s visibility on the external factors that affect it, allowing it to act actively in the face of these inconveniences, finding innovative solutions, and taking initiatives to transform these obstacles into opportunities, increasing the resilience of its operation. in addition to favoring the creation of new business models.

As a result of the integration of the SDGs to the operational strategy of the company, it will be able to broaden its perspective of the market in which it develops. In this way the company can ideate new strategies to improve the management of the company and its risk management both outside and inside the organization. In addition, the personal development of its employees is promoted by increasing their engagement through participation in strategic innovation processes. This increases the business impact of the sustainability strategy.

 

How does the SDGXCHANGE methodology work?

The SDGXCHANGE tool helps companies to ideate, reframe and prototype sustainable business models and strategies using the SDGs, through a practical methodology that allows generating strategic innovation within the business. The methodology is based on the GRIPS process which guides through 5 steps – Get Started, Ideate, Reframe, Prototype and Share. It generates strategic innovation for sustainability and aligns the company’s business objectives with the most appropriate SDGs.

This tool allows the evaluation of the change readiness and the level of sustainability of the company as well as the definition of the SDGs relevant for the organization. It integrates the SDGs to enrich the long-term operational strategy and uses them as a tool to redesign the company’s business scheme. The tool expands their view of the current market in which they are involved, to ideate strategies that facilitate the exploration of new opportunities. These mechanisms allow the company to improve its business management.

About FUNDES

FUNDES Latin America is a consulting firm with more than 35 years of experience in developing MSMEs and their successful integration into the value chain of large corporations. FUNDES has worked with more than 100 multinational companies, with more than 30 governments, development agencies, and foundations, and has implemented projects in 17 Latin American countries that have impacted and transformed the lives of more than one million micro, small and medium enterprises, with value co-creation programs and innovative and competitive solutions to the main challenges of the sector. 

Business Units:
  • FUNDES Consulting

Dedicated to developing business services that support the strategy of corporations, foundations, and governments seeking to integrate small businesses into the traditional economy. FUNDES Consulting’s offering targets the Business segment, which provides in-depth knowledge of large companies’ MSME partners and enables the development of interventions that increase business results and impact the sector. And the Impact segment aims to promote impact initiatives that leave a mark in the environment in which they are located.

  • FUNDES Catalyst

Dedicated to promoting micro-entrepreneurs who are otherwise excluded from innovative services in Latin America’s traditional markets. Latin America’s traditional marketplaces are excluded. We develop, launch and operate innovative solutions and start-ups to solve the fundamental business problems of micro and small enterprises, which are typically family-owned and represent 98% of all businesses in the region.

Contact:
internacional@fundes.org

Fiorella Blanco,

Director of FUNDES Consulting

Corentin Larue,

Director of FUNDES Catalyst

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