Professor Bhagwan Chowdhry is looking for ways to involve businesses in social good by providing the right incentives. He says there is a fundamental tension in that social good usually comes at the expense of profits and this tension must be resolved.
We can get the best of both worlds, he says, by involving both socially conscious and regular investors. His research reveals a basic solution: Let regular investors own the businesses, but then be able to sell a security he calls “social impact guarantees” that will partially finance projects. If a business fails to meet certain agreed upon socially beneficial metrics, the investor gets paid back.
To get the full picture, take some time and watch Professor Chowdhry’s interview above.