Corporate Impact Careers (read time: 14 min)

Written By Second Day

So you want to work in Corporate Impact?

Many people are drawn to the idea of using business to do good in the world, for good reason! The upside is clear一corporations have an outsized financial imprint on the world, and so making that imprint more socially responsible could be a huge deal. No matter what happens in the social or public sector, the private sector will be the largest employer and environmental player in society for the foreseeable future. If that power can be harnessed for a social good, then real, lasting changes could be made to the fate of humankind. No big deal.

While the allure of working towards social impact through the private sector is appealing, there are numerous potential pitfalls as well. Thousands of people have tried to change corporations for the good and end up being changed themselves. Corporate incentives are difficult to navigate or reject, and it is easy to lose yourself in a race for advancement or total disillusionment.

This overview guide highlights some areas in particular where we see real potential for having a positive social impact in the for-profit context. Specifically, we outline eight primary areas of corporate impact. This is just the tip of the iceberg一there are numerous links to Second Day resources throughout the guide to dive deeper based on your interests.

This guide was written by Phil Dearing in partnership with the Second Day team.

Eight areas of corporate impact

These eight areas are inter-related but distinct enough for us to touch on them separately.

Environmental, Social, and Corporate Governance (ESG)

Impact Investing + ESG (read time: 30 min)

OVERVIEW

Environmental, social, and corporate governance (ESG) refers to three, specific ways to measure the sustainability and societal impact of an investment. ESG stands for

  1. Environmental criteria such as energy use or pollution

  2. Social criteria such as working conditions or engagement with the local community, and

  3. Governance criteria such as preventing conflicts of interest or self-dealing

At its core, ESG investing is focused on the “how” of a company’s operations, rather than the “what.” Importantly, it is possible that a non-impact focused company scores well on ESG criteria. For example, it is possible that a company that creates iPhone cases is more ESG-aligned than its peers if it pays its workers above industry standards, is working to reduce carbon emissions, and has relatively better board diversity.


POTENTIAL IMPACT

Investors and board members of companies hire teams to understand the impact that a business is having in these three areas so that they can work to improve it. The impact thesis is that, by truly understanding the impact a company’s operations are having on the environment and local community, there will be more pressure and opportunity for the business community as a whole to improve its practices.


POTENTIAL ROLES

Entry-level Analyst or Associate roles exist at ESG consultancies, ESG tech companies, banks or investors, and corporations themselves. Some of these roles are attainable right out of school and others require a few years of work experience and exposure to for-profit investing. Since this is a new and evolving field, the criteria for landing one of these roles can vary widely, and networking is critical to understand who may be hiring (or even to learn the names of the organizations doing the work you are interested in). There are a lot of these roles around, but they are also quite competitive. Click here to learn more about ESG careers and how to get them!

Impact Investing

Impact Investing + ESG (read time: 30 min)

OVERVIEW

Impact investing refers to the investments made by companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. Essentially, the goal of impact investing is to have the best of both worlds: invest in a company that will create financial returns for you and social returns for the world. Classic impact investments are in areas such as clean technology, healthcare, or education. The impact investing field has grown over 300% since 2012 and is poised to continue growing in the years to come. Second Day’s impact investing guide provides a detailed overview of this field, with links to several other resources to build your knowledge of this space.


POTENTIAL IMPACT

Impact investing strives to direct more funds towards companies that will have a positive impact on the world. Additionally, experienced impact investors often sit on the boards of organizations to help shape their path in a direction towards social good. Impact investing goes beyond ESG in that the goal is not just to implement good corporate practices, but to ensure that the product or service that receives investment is doing good in the world. Impact investors vary widely in their size and how much they weigh potential impact vs financial returns for their organization, so it’s important to understand the field and think about where you want to plug in. Impact investors focus on dozens of different topics, including: education, health, global development, gender equity, racial equity, and financial services.


POTENTIAL IMPACT

A key decision that you’ll need to make is whether you want to actually be an investor or whether you want to be in a non-investor role within the field of impact investing (there are many of these!). A range of non-investing roles exist, including positions at field-building organizations, doing impact measurement, or working in back-end roles. If you are committed to investing, you likely won’t be able to get an investor position immediately out of school, and so you’ll have to work strategically towards those roles at the start of your career. There are typically two routes that eventually lead to impact investing placements a few years out of school: doing traditional for-profit investing or doing social impact work in the field. The common route is to start by working at a bank or consulting firm to learn how to analyze financials and make investments before pivoting into a fund that is focused on impact. The downside of this is that far more traditional investors are interested in pivoting into this work than there are roles available. The other route is much less clear, but increasingly possible. If you can establish yourself as someone that deeply understands an investment area (e.g., agriculture in the developing world or education technology in the US), there may be opportunities to pivot over to an impact investing fund and use your expertise and connections to source potential deals.

Corporate Social Responsibility

Corporate Social Responsibility (read time: 17 min)

OVERVIEW

Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. CSR teams sometimes work to improve a business’s internal practices, but this is typically the domain of an in-house ESG team. For the purposes of this guide, we examine CSR that is externally-focused: giving away money to community initiatives, matching employee donations, developing volunteer opportunities, or promoting causes or initiatives of community partners.


POTENTIAL IMPACT

Large corporations have the ability to donate significant amounts of money to nonprofits or other community initiatives. Their thousands of employees are also eager to give back and use their time and energy for social good. Historically, much of CSR has focused on splashy initiatives that improve the brand of the corporation itself, rather than giving away money in the most effective way. While there is always a need to make the “business case” to corporate leaders about CSR work, this line of communication to senior leadership gives strong CSR leaders a lot of power and influence. The sweet spot for a CSR team is making your corporation’s giving strategies more effective while simultaneously building its brand in a positive light.


POTENTIAL ROLES

It is often hard to land a CSR role right out of school, so if this is a goal of yours, you need to position yourself strategically. Working for a nonprofit or foundation can help you pivot into CSR. Sometimes, CSR leaders are also pulled from other positions within a company. This would be a very slow path at a large corporation, but there are much more attainable opportunities to help shape CSR strategies if you are proactive while working at a fast-growing start-up. Finally, there are a few roles at CSR advisory firms that do hire graduating seniors, but these firms are small and the positions are very competitive to get.

Social Entrepreneurship

Social Enterprises (read time: 14 min)

OVERVIEW

A social enterprise is defined as a business that has specific social objectives that serve its primary purpose. Social enterprises typically use an earned revenue business model that also generates some sort of positive social impact. For example, VisionSpring sells affordable eyeglasses across the globe for the 2.7B people who have been ignored by other producers, and Grameen Bank makes microloans to entrepreneurs that have traditionally been excluded from lending markets. Similar to impact investing, social enterprises have a large range in how much they prioritize and how they define “impact.” In general, a social enterprise will fit into one of four categories:

  1. A typical for-profit that frames its work around social impact, often with “give back” initiatives (e.g., TOMS, Warby Parker)

  2. A for-profit focused on a difficult social issue (e.g., Propel, Upsolve)

  3. A nonprofit with a core income-generating product (e.g., Goodwill, Grameen Bank)

  4. A nonprofit that earns some of its revenue but also relies on donations significantly (e.g., Acumen, charity: water)


POTENTIAL IMPACT

Social enterprises are exciting because of their scalability. While a traditional nonprofit often needs to receive donations to grow their operations, a social enterprise can increase their revenue and their impact by selling to more customers. The biggest challenge with social enterprises is that many social issues can’t be solved with a for-profit model alone, requiring the coordinated efforts of nonprofits, business, and government to make real change. While social enterprises can be massive in scale, the term most often refers to smaller organizations and startups that are rapidly growing.


POTENTIAL ROLES

Social enterprises, particularly smaller and quickly growing ones, are often great places to start your career. If you are someone that enjoys learning by doing and taking on a range of roles, working for a social enterprise could be a great way to do so. Because these organizations are often scaling so fast, there are generally fewer formal job postings or processes than other industries. As a result, networking and talking to people in the social enterprise world is a must.

Social Impact Consulting

Social Impact Consulting (read time: 14 min)

OVERVIEW

While you may think of consulting as giving business advice to large corporations, there is a whole industry that focuses on advising nonprofits and foundations on their strategy and operations. The field of social impact consulting generally involves two main actors: small firms that focus on consulting for social impact and large consulting firms that focus on consulting for large corporations but also do some social impact projects at a free or discounted rate. The day-to-day activities of social impact consulting are often similar to the work of traditional consulting—financial models, interviews, research, and presentations—but the focus of the work is quite different.


POTENTIAL IMPACT

Developing a strategic plan, unlocking a new fundraising pitch, or helping to improve talent practices can make a huge difference for a social impact organization. While the potential of social impact consulting can be limited in scope一you typically serve wealthier organizations that can afford consulting services, you may feel distant from the impact itself, and you often don’t stick around to see your recommendations implemented一it also provides a chance for you to get involved with organizations when they are at a critical inflection point in their growth. Some people do social impact consulting as a phase in their career in between operating roles, while others build a career focused on advising organizations.


POTENTIAL ROLES

Getting a role at a traditional consulting firm is more straightforward since those firms hire thousands of recent college graduates each year, but it is possible to get an entry-level position in social impact consulting right out of school. If you get a role at a social impact consulting firm, you’ll get to spend all of your time on this work, but entry-level roles typically don’t pay as much as they do at corporate consulting firms. If you hope to be involved in impact work at a traditional consulting firm, it can often be quite hard to do so until you are 2-3 years into your career. Many young professionals complain about misleading promises from corporate consulting firms about their ability to do impact-related work. If you are open to doing additional projects on top of your existing client work, Inspire offers opportunities for pro bono consulting for nonprofits in a more informal setting. Second Day doesn’t delve into traditional consulting recruiting advice, but the Social Impact Consulting career guide provides significantly more detail on the day to day work and recruiting process for social impact focused consulting organizations.

Diversity, Equity, and Inclusion (DEI) Roles

OVERVIEW

DEI stands for Diversity, Equity and Inclusion. Diversity is the presence of differences within a given setting. Equity is the process of ensuring that processes and programs are impartial, fair and provide equal possible outcomes for every individual. Inclusion is the practice of ensuring that people feel a sense of belonging in the workplace. There are many different titles and definitions for this work, but the activities at its core center on making organizations accessible to people that have historically not been welcome.


POTENTIAL IMPACT

The private sector provides the greatest opportunity for high wages and upward mobility in the US, but BIPOC individuals are still systematically excluded from higher-paying and leadership roles. This is true across industries一for example, at Harvard in 2020, there were 33 tenured professors that identified as women of color compared to 620 that identified as white men. In 2020, the percentage of women CEOs of Fortune 500 companies reached an all-time high of...7%. Changing company talent practices, values, and ways of working can be transformative for creating an economy that works for everyone.


POTENTIAL ROLES

DEI roles are rapidly growing in the private and social sectors. A common starting role is as a DEI associate or an HR associate with a focus on DEI. The roles can be both fulfilling and exhausting, with potential to grow quickly within an organization or as a consultant. A guide on DEI careers is coming soon.

Results-Based Financing

OVERVIEW

Results-based financing is an effort to increase government funding for social programs that are effective and structuring funding so that it is tied to the results that are actually achieved in the real world. This work is new and a bit confusing at first glance, so we recommend looking at these overviews from the World Bank, Third Sector Capital, or SIDA.


POTENTIAL IMPACT

While government funding has historically been distributed without close evaluation of the outcomes that are achieved with that funding, advocates of results-based financing see their work as a path towards increasing the amount of funding that goes to effective organizations. Critics of the approach often cite the fact that some social challenges are easier to measure (e.g., income is much easier to track than mental health quality) and that the cost of implementing these deals is too high to scale broadly. However, new models and ideas are continuing to arrive in this space, making it an exciting area if you believe in the power of government for social progress.


POTENTIAL ROLES

There are a number of results-based financing firms that specialize in creating these agreements between government, social service providers, and funders. Many of these organizations hire entry-level analysts out of school, which represents a great opportunity to build an analytical skill set and launch your career in a fast-growing field. Some of the biggest organizations in this space include Third Sector, Social Finance, Instiglio, and the World Bank. A guide on results-based financing careers is coming soon.

Capitalist Systems Change

OVERVIEW

Beyond these specific organizations, there are a number of other organizations working to change how corporations operate in the US. Some, like the Long-Term Stock Exchange, are building a platform that incentivizes long-term thinking rather than short-term profit. Others, like B Corp, provide a credential for businesses to incentivize a positive social outcome. Finally, many organizations, such as the Economic Policy Institute or Open Market Institute,  focus on research to influence government regulation and policy.


POTENTIAL IMPACT

Currently, the incentives to maximize short-term profit and avoid taxes whenever possible make it hard for even well-meaning business leaders to change how their work is done. There is incredible potential in the idea of changing the structures that surround capitalism and the role of business in society. At the same time, this is often abstract and hard to measure.


POTENTIAL ROLES

Because the area of capitalist systems change involves a wide range of organizations, the roles vary. In general, if you build up an expertise reading and conducting informational interviews with people who work on these issues, you may be able to find an opportunity doing research, advocacy, or a similar position at an organization focused on capitalist systems change. The best way to learn more is to read articles, follow influential leaders on twitter, and connect with whomever does work that inspires you. While Second Day doesn’t have a guide specifically on careers in this field, the ESG and Impact Investing career guide touches on field-building careers and is broadly relevant here.

Final thoughts on working in corporate impact

If you’ve made it all the way through this guide, you might have some new thoughts on how and where for-profit business models can make a positive impact on society. While some people may be skeptical about for-profit companies in social impact and others see them as the answer to many societal challenges, the truth likely lies somewhere in-between. For-profit companies are here to stay. They certainly can’t solve social challenges on their own, but they also shouldn’t be ignored. It is people like you that we need to dig into the messiness of it all, understand how corporate incentives work, and look for untapped opportunities for impact.

If you are really passionate about one of these areas, then that is fantastic! Go forth and do amazing things! If you are still searching, then you may also want to check out some of the other career guides on the website. No matter what path you choose, Second Day is here to help you navigate a career that works for you and also makes a positive impact in the world.

Last updated: July 2021

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