How tech can help establish a synergistic rapport between profit and purpose

ESG is an acronym for environmental, social and governance, the three key factors in measuring the sustainability and ethical impact of an investment in a company or business. It has become a major concern in modern business and most socially responsible investors screen companies using ESG criteria.

Though usually associated with things like climate change, pollution and resource scarcity, in reality ESG covers a much wider range of socioeconomic issues such as employment practices, diversity as well as social and cultural ethics.

Philanthropy, for one, is an important factor in the ESG framework, pushing to the forefront the pressing question: How can companies, especially private firms, and nongovernmental organizations (NGOs) improve their philanthropic activities as their technological capabilities continue to evolve?

On September 5, a diverse group of speakers and panelists, including journalists, academics, business leaders, NGO leaders and heads of international organizations, gathered for the Tech for ESG Innovation conference to discuss the dynamic intersection of technology, the private sector and organizations working for the greater social good, especially NGOs, in shaping new trends in global philanthropy.

The online meeting was hosted by the THINC Fellowship, a 12-month program created by Internet giant Tencent and Beijing-based nonprofit foundation Viva la Vida. The program encourages an open dialogue on a range of topics related to technology and humanity.

Private to tech 

The private sector is reshaping global philanthropy. According to Antonio Basilio, Director of the APEC Business Advisory Council (ABAC) International Secretariat based in Manila, the Philippines, the traditional notion of corporate philanthropy, characterized by writing checks and passive donations, has often been perceived as a means to enhance a company's image and marketability. "From an accounting point of view, corporate social responsibility was often seen as just another expense," Basilio said.

Today, companies are starting to realize that social and economic goals are not necessarily incompatible, but can be mutually reinforcing. They are slowly but surely aligning their philanthropic efforts with their core values and business operations. "This creates a synergistic relationship between profit and purpose, and this approach not only enhances a company's public image, but also drives innovation and sustainable growth in the world at large," Basilio added.

However, as private companies and NGOs play their role in improving society, there will inevitably be hurdles to jump. For example, not all those in need of help are able to access the necessary information online.

"They (NGOs) often witness firsthand the gaping inequalities on digital platforms," Hawa Diallo, chief of the Civil Society Unit of the UN Department of Global Communications, said at the conference, citing the example of her native Sierra Leone in West Africa, where marginalized and underserved populations generally find themselves wholly excluded from the digital age.

"Today, while NGOs work with privileged donors and funders, they are equally, or really should be equally, committed to engaging with local communities at the grassroots level and highlighting the stark inequalities that exist," she said.

But the situation is improving.

More and more young people are using digital platforms in the Global South, the nations of the world considered to have a relatively low level of economic and industrial development and typically located to the south of more industrialized nations. And especially in Africa, Diallo said, mobile technology is something local communities can access and use to their benefit.

"The embrace of technology and the forging of partnerships with the private sector can only empower NGOs to address global challenges more effectively," Diallo added.

Beyond financial contributions, "the private sector brings unique resources and capabilities, leveraging expertise, technology and global reach to address complex social challenges," Basilio said. For example, philanthropy has been revolutionized by the emergence of digital platforms, including social media, data analytics and other emerging technologies. These innovations have enabled more informed decision-making, greater transparency and accountability, as well as more efficient beneficiary outreach.

Sulaeman Dederina, a lecturer of finance at the National University of Singapore's Business School, said, "When we talk about corporate philanthropy today, we should not only focus on funding in terms of money, but we should also think about other resources."

Tencent, for one, is encouraging the younger generation to get more involved in what's going on in society by leveraging its core competency in technology and social networking. For instance, Tencent Foundation's 99 Giving Day—its public charity campaign—takes place annually in September, during which the company matches all donations made by users through its online platforms. The campaign attracts many young adults.

"This is a very good trend," Dederina added.

A Chinese example 

China's major Internet businesses like Alibaba and Tencent have changed the lives of many Chinese, Dou Wenyu, Academic Dean of SKEMA Business School China Campus, said during the THINC meeting.

Yijun County in the northwestern province of Shaanxi has a population of roughly 100,000 people. Three years ago, its e-commerce sales were about 2 million yuan ($275,000). Fast forward to today, they have hit 70 million yuan ($9.6 million). Dou said Alibaba played a facilitating role in the whole process. The company helped local farmers sell high-quality local agricultural products, such as apples, corn and walnuts, on its flagship digital retail platform Taobao.

What Alibaba has done with Yijun has been replicated in remote and less developed regions in China. The company actually has a well-developed system for training e-commerce livestreamers and creating well-developed logistics networks in remote regions, Dou added.

Companies don't necessarily have to donate money directly. They can do other things, such as organizing philanthropic activities, using all kinds of exciting and interesting ways to get young people involved in the philanthropic process, Edison Tse, an associate professor of management science and engineering at Stanford University, chimed in.

In his recent book Do Good and Prosper, Tse detailed the interplay between China's philanthropy and business innovations. Take China's rural revitalization strategy, which is closely related to the elimination of absolute poverty and is a core component of the Central Government's goals to promote more balanced economic and social development, for example. Many Chinese tech companies are participating in it and instead of just offering up instant fixes, or money, they focus on helping people build new businesses and make money, according to Tse.

"What the big tech companies in China have done makes charitable acts a common thing to do," Tse continued. "Through their strategies, by connecting with, touching younger generations through different programs, they managed to curb the public misconception that only wealthy individuals, or wealthy families, can make a difference. Even the smallest act makes a change."

Shi Han, head of the ESG Center at the Hong Kong University Institute for China Business, said at the conference that the Chinese companies' large scale of experiments can also bring more valuable and pertinent solutions to African countries and other developing countries.