How corporations can move from compliance to competitive advantage through impact markets
With ESG and CSR on the ropes, it’s time to embrace new tools that incentivize economies that work for everyone.
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ESG and CSR were designed to do more than tick boxes. ESG was created to help corporations reduce risk, while CSR has helped build brand equity and achieve a social mission. Yet today, amid rising political backlash and market skepticism, many boardrooms have retreated from ESG and CSR commitments, reducing these once-strategic tools to mere compliance checklists.
Mechanisms such as cap-and-trade systems, targeted subsidies, taxes, and restrictive regulations can still guide corporate behavior, but because they shift with political leadership, they are better at curbing harm than at incentivizing consistent positive outcomes.
Within this gap lies a powerful opportunity for market-driven tools that tie financial rewards directly to social and environmental performance. PepsiCo Mexico and IFC Global Trade Supplier Finance, for example, set up a $75 million facility, which offered affordable financing to PepsiCo’s suppliers based on their progress towards sustainability targets. If suppliers reduced carbon emissions or addressed child labor, suppliers could access lower financing costs and improved working capital. In return, PepsiCo could ensure improved supplier practices and a stronger, more sustainable supply chain.
By taking similar approaches, corporations can move past compliance and embed impact into their core strategy, unlocking new pathways for growth and societal benefit.
This logic was a central theme in Acumen’s recent webinar, How Corporations Can Leverage Impact Markets, where speakers underscored that the most effective shifts occur when corporate goals are directly tied to rewards for verified outcomes. Tools such as Social Progress Credits (SPCs) and other outcome-based mechanisms were showcased as practical ways for corporations to align business performance with measurable impact, demonstrating that embedding impact can be both strategic and achievable.
From reporting to rewarding
The majority of corporations already track cost, quality, and productivity with precision because these metrics directly affect profitability, market share, and competitiveness. Impact deserves the same rigor.
Verified social and environmental outcomes can create tangible business benefits. They can open doors to new markets by meeting customer and regulatory demands, strengthen brand reputation by showing measurable progress, and even improve financing terms when banks or investors offer better rates through tools like ESG-linked loans or performance-based subsidies.
For example, SK Group, a South Korea-based corporation, launched Social Progress Credits (SPCs) in 2015 to financially reward social enterprises for the social and environmental value they generate. SPCs are an outcome-based incentive mechanism that converts the social performance of enterprises into monetary value, rewarding them with cash incentives proportional to their impact. In the webinar, SK Group described SPCs as a “new commodity” that turns social and environmental value into a tradable market asset, motivating more actors to compete for outcomes that benefit both business and society.
SuperBin, a South Korean social enterprise featured in the session, demonstrates how this works in practice. Its AI-enabled reverse vending machines collect and sort plastic waste, earning SPCs for every verified ton recovered – credits that capture both environmental gains (recycling, reduced waste) and social value (jobs and community engagement). These credits are purchased by SK Group and other corporate buyers seeking to meet sustainability or inclusion targets in a market-based way.
For corporations, SPCs offer three strategic advantages:
- Clear ROI on impact spending – payments are tied only to verified results.
- Flexibility to meet ESG/CSR goals without overhauling operations, by sourcing credits from high-performing partners.
- Access to a scalable, data-driven mechanism that integrates impact into core business performance metrics.
By purchasing SuperBin’s verified impact, SK Group gained early insight into an emerging market and signaled its role as an innovator in sustainability-driven business.
As Gayoung Imm, Associate Principal Researcher of SK Group notes, “We believe traditional businesses have much to learn from social enterprises, which are solving societal challenges while generating revenue through their core business models. By collaborating with them and monetizing impact, that is making it tradable, we unlock a new market opportunity. When a previously untraded commodity becomes tradable, it encourages more actors to compete for the largest share of the impact market, ultimately benefiting society as a whole.”
This is impact as strategy, not compliance. Unlike philanthropy, SK Group’s model embeds social value into its financial strategy, aligning shareholder and societal benefit while positioning the company to compete in markets increasingly shaped by sustainability performance.
The next step is understanding how corporations can leverage outcome-based tools and partnerships to embed that impact directly into their business models.
Three high-leverage, low-resistance ideas
1. Tie corporate impact to verified outcomes
Traditional ESG and CSR programs often track activities rather than outcomes, which can dilute accountability and slow progress. Incentive structures flip this model by rewarding verified results, not just intentions, thus aligning the corporate’s business performance with social or environmental gains. A compelling example is the partnership between Green Worms, an Acumen investee, and Hindustan Unilever Limited (HUL) in India.
In India, corporations are legally required to recover the plastic waste they produce. Hindustan Unilever Limited (HUL) goes further by financially rewarding social enterprises like Green Worms for every kilogram of plastic collected and processed, even when the waste is not from Unilever’s products. Green Worms addresses both the waste crisis and poverty by creating dignified, safe, and fairly paid jobs for waste collectors. Through a verified plastic credit system, this partnership delivers a win–win: HUL exceeds its recovery obligations while Green Worms expands operations, raises wages, and improves working conditions for its workers.
The first step in replicating such a model is to identify measurable outcomes that align with ESG or CSR goals such as plastic recovered, number of women employed, or carbon emissions avoided. CSR budgets can be applied to outcomes-based financing, and those outcomes could achieve ESG goals. Corporations should engage an independent verifier to ensure credibility, then set clear payout metrics (e.g., a fixed amount per verified ton of waste processed) in supplier or partner contracts. Releasing payments only after validation creates a self-reinforcing loop that drives both accountability and continuous improvement.
2. Make ESG a source of competitive advantage
Many corporations already collect ESG data, yet it often sits underused within compliance reports. BNP Paribas, however, recognized an opportunity to expand its client base, and to support sustainable communities and cities. By linking the performance data of social housing associations to financial incentives, BNP Paribas transformed ESG from a cost center into a driver of competitive advantage. Through sustainability-linked loan products for social housing associations in the UK, BNP Paribas offered preferential interest rates when borrowers met defined environmental and social targets. Through this structure, organizations such as L&Q, Optivo, Clarion Housing Group, and Peabody Trust collectively raised £325 million in debt, with investment terms directly tied to emission reductions and social impact goals. For BNP Paribas, more affordable, high-quality homes meant better economic growth, more opportunities for decent work, and less poverty. This model not only expanded its client base but also strengthened its reputation as a leader in sustainable finance, positioning the bank to capture growing demand for ESG-linked products.
To replicate such outcomes, corporations can begin by auditing their ESG or CSR data to pinpoint high-performing areas, such as greenhouse gas reductions, workforce diversity improvements, or community investments. Partnering with a third-party verifier ensures these results are credible and can be made tradable or financeable. Verified outcomes can then be leveraged to negotiate better financing terms, generate revenue through innovative mechanisms, or unlock access to new markets.
3. Partner with social enterprises to accelerate innovation
Corporations are under increasing pressure to innovate quickly but face internal constraints: long procurement cycles, brand risk, and slow adaptation. Social enterprises, by contrast, are designed to navigate complexity, reach underserved markets, and adapt quickly. They can prototype corporate impact ambitions in real-world contexts without requiring a full operational overhaul.
One example is Promethean Power, another Acumen-backed social enterprise in India that partnered with Hatsun Agro, one of the country’s largest private dairy companies, to tackle spoilage in rural milk collection. Traditional diesel-powered refrigeration was expensive and polluting, leading to 20–30% losses. Promethean developed a thermal energy storage chiller that could operate under unreliable grid conditions, cutting spoilage by up to 90% while eliminating the need for costly diesel. For Hatsun Agro, the innovation improved supply-chain efficiency and milk quality, while farmers gained transparent payments, higher incomes (30–50% increases), and confidence to expand production. This partnership demonstrates how social enterprises can rapidly prototype and scale solutions that deliver measurable business and social value.
To put this into practice, a corporation can start by mapping its sustainability priorities to SDG-aligned challenge areas where it seeks measurable change. From there, it can identify and partner with a social enterprise that has a proven track record of delivering impact in that space. Together, they can design a time-bound pilot in which funding or incentives are tied to clearly defined and independently verified outcomes. This allows the corporate partner to test new models in real-world conditions, measure the return on investment, and refine the approach before committing to larger-scale implementation.
Conclusion
Compliance should be the baseline, not the benchmark. The corporations that will define the next decade are those that see ESG and CSR not as obligations to manage, but as critical success factors to grow, compete, and lead. When impact is embedded into the core business model – measured, rewarded, and scaled, it stops being a cost and starts becoming a source of advantage.
Partnerships with social enterprises offer a direct route to this transformation. They bring agility, innovation, and proven capacity to deliver results in complex environments. Coupled with tools like Social Progress Credits, impact-linked finance, and other outcome-based mechanisms, corporations can convert sustainability and inclusion goals into tangible business gains such as new markets, stronger brands, and better financing terms, while delivering real societal benefit.
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