November 8, 2012
The famous Stanford marshmallow experiment tested the ability of children to defer the immediate enjoyment of a treat for two treats 15 minutes later. Some children would immediately eat their marshmallow as soon as they were alone with it, but a third of the children held out long enough to get two marshmallows.
I’m reminded of this experiment four times a year. Company behaviour and market reaction are significantly affected by short-term, quarterly performance. There are simply too many financial, social and economic issues in the world today that need longer-term thinking and patient solutions.
There are plenty of opportunities to address core social issues and support social enterprises while generating solid financial returns over the long term. I believe that businesses can look at how they can best support social enterprises. At RBC, we’re figuring out how to structure financing so that social benefits are not simply a happy coincidence, but part of the mainstream economic model. It’s early days for us, but we’re committed to taking a leadership role in impact financing.
In January, we announced the creation of the RBC social finance initiative, a $20 million commitment to help foster and cultivate positive, wide-ranging social and environmental change. This commitment includes:
Addressing core social and environmental issues and providing a financial return are not mutually exclusive. On the contrary, they are becoming more closely linked than ever before. And they are both critical to building long-term success.
RBC donates $1 million to the MaRS Centre for Impact Investing
RBC is excited to be part of this shift. We are ready and willing to provide support and resources to help make it happen. But enthusiasm alone won’t get the job done. We first need to build a strong foundation of expertise, creating a positive environment where social finance can succeed. Today I was pleased to announce a $1 million donation to the MaRS Centre for Impact Investing from RBC Foundation to help build this foundation.
This gift will help:
I’m confident the Centre will play a critical role in supporting new enterprises whose core mission is to address core social and environmental issues while also generating a financial return.
We’re still in the early days of social finance in Canada, and there is a tremendous amount of work to be done. By encouraging enterprises to provide market-based solutions to environmental and social issues, social finance can open doors to new opportunities, drive economic growth, protect our environment, allow communities to reach their full potential, and offer a brighter and more sustainable future to all.
RBC hopes that our commitment to social finance in Canada will not only spark entrepreneurship and innovation, but also encourage other organizations to make similar investments that generate positive social and environmental change.