This article was originally published by Stanford Social Innovation Review.
“To describe how far the world is from achieving the Sustainable Development Goals (SDGs), the UN and other organizations often frame the challenge in terms of finances, describing the gap as a $5 trillion to $7 trillion problem.
While viewing the issue in terms of money may make it broadly accessible, it comes with a cost: It primes people to prioritize financial considerations above other values, including equity and sustainability, when they are developing solutions. It encourages a cost-benefit mindset that privileges productive efficiency—such as minimizing expenses—over distributive efficiency, which focuses on ensuring that resources are allocated to their most valuable use. And it encourages organizations to ignore important drivers of value creation—people, relationships, knowledge, and processes—which then suffer underinvestment as a result, leading to new costs, lost productivity, and decreased capacity for creative problem-solving.
Even if we cannot come up with a perfect description of the barriers to achieving the SDGs, it’s within our reach to create a clearer understanding of all the resources we can pour into solutions. We must go beyond the business-as-usual definition of capital as money, buildings, land, and equipment—the assets that appear on a balance sheet. We must broaden our understanding to include social, natural, and intellectual resources to have a better chance of building a better world.
Such a multi-capital framework connects an organization’s values, strategy, business model, and metrics to capabilities development, community well-being indicators, and the SDGs.
…To use multi-capitalism, start “thinking in capitals.” Ask questions like: What intangible resources does your organization develop and deploy? Who are your stakeholders and how do you develop and nurture relationships with them (social capital)? What are the key competencies your people need to create value for stakeholders (human capital)? How do you intentionally create cultural capital to ensure equity, inclusion, and transparency? After finding the answers to questions like these, you’ll integrate the answers to form a cohesive strategy.”
Read on at: Stanford Social Innovation Review
