Corporate Social Investing

June 2020

To the Editor of SSIR,

I was pleased and encouraged to see your piece on The Rise of the Corporate Social Investor by Karoline Heitmann et al. New CSI approaches offer the potential to reimagine relationships between corporations and change agents and in the process do away with broken, old and limited thinking about the necessity for adversarial relationships between the corporate and social sectors. Yet clearly there are inherent tensions with the model and CSIs carry with them the imperative to deftly balance the value of corporations – which have unique expertise and are a necessary avenue to scaled change – with a recognition of the power imbalances that often underpin social injustice and inequality.

We have seen this first-hand at the Working Capital Investment Fund. Initially incubated within Humanity United – the human rights focused foundation of eBay founder Pierre Omidyar and his wife Pam – Working Capital is an early stage venture capital fund that seeks to identify new and innovative solutions to the persistent and systemic problems of labor exploitation in supply chains. The Fund counts upon the Walmart Foundation, Apple, Disney, C&A Foundation (now Laudes Foundation), Zalando as well as impact investors among its Limited Partners. As a thematic CSI targeting forced labor and labor exploitation in the supply chains of multinational companies across very different industries, the Fund focuses on investing in solutions that provide business and workers with better visibility into labor conditions within their extended supply chains.

In designing the fund we realized that to truly drive change at scale and systemically improve corporate practice we needed business around the table. Through our previous decade-plus of work in the space we recognized that severe labor exploitation in extended supply chains is a pervasive and increasingly well documented risk to companies and that the current tools available to corporations (social audits, voluntary codes of conduct, etc.) are limited and ineffective.

Including corporate representation in the design of the Fund allows for a win-win. Corporations provide feedback for portfolio companies on product market fit and the ability of tools to address pain points. They are also in a position to help early stage innovators scale as they begin to show traction. In exchange corporations get exposure to innovation and new ways to embrace transformative solutions for vulnerable workers with potential business relevance.

As noted by the authors, this is an emerging field and remains fraught with challenges. Laws restricting corporate foundations from business alignment due to self-dealing risks are vague, and often tricky to navigate. Further, scrutiny and cynicism over CSI legitimacy are real and there is constant pressure to demonstrate that your work isn’t simply “impact washing” for uncommitted corporates. We’ve taken deliberate steps to balance business interests with worker rights by allowing companies to participate in governance but not to make direct investment decisions, by ensuring we invest in tools that are used by workers directly, by integrating rigorous third-party impact assessment to ensure integrity to our mission, and by sharing learning about how the innovations we support lead to change or don’t.

Under the right circumstances this model allows for deeper and more scalable impact as investors, advocates and CSI’s complement each other’s expertise and experience and use collective insights to address issues more deeply and effectively. When we started Working Capital four years ago there were very few CSI initiatives. Many corporations were unfamiliar with these approaches and few were able or willing to transcend traditional grantmaking and philanthropic approaches. It is encouraging to see these models now receiving greater attention and becoming a more mainstream tool in the social change toolkit.


Ed Marcum
Managing Director
Working Capital Investment Fund