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The Interview

corporate governance

Want to increase the impact of your corporate philanthropy? Link it to your core business, says Repsol Foundation Chair 

22 November 2023 • by Sophie Bacq in The InterviewPodcast availablePodcast available

Sophie Bacq speaks to António Calçada, Executive Managing Director of the Repsol Foundation, on how the model of corporate philanthropy is shifting from charitable giving towards investing in entrepreneurial ventures that can...

Sophie Bacq speaks to António Calçada, Executive Managing Director of the Repsol Foundation, on how the model of corporate philanthropy is shifting from charitable giving towards investing in entrepreneurial ventures that can create positive social and environmental impact.

Companies have long practiced some sort of corporate philanthropy. In the early 20th century, wealthy business owners sought to give back to their communities by funding a range of charitable causes, while the social and economic movements of the 1960s and 70s gave rise to calls for businesses to take responsibility for their actions. 

As organizations now look to do well by doing good and creating value for all stakeholders rather than just their own, an increasing number of companies are establishing corporate foundations to manage and direct their philanthropic projects. 

So, what’s behind this trend? António Calçada, Executive Managing Director of the Repsol Foundation, the philanthropic arm of the Spanish energy and petrochemical major, believes a foundation can act as an engine for increased engagement with and commitment to societal issues across the organization. It can also give more visibility to Corporate Social Responsibility (CSR) efforts at a time when workers are increasingly choosing to work for companies based on their purpose and values. 

Calçada admits that, in the past, CSR programs have sometimes got a bad rap for “social washing” – that is, promoting activities that might generate nice photographs for the annual report, but which in reality have very little impact, or worse, a negative impact. This is now changing as organizations like Repsol increasingly look to link their CSR initiatives to their core business. 

“You need to put accountability on the social and put the social into the mainstream of the business,” he told me during a recent I by IMD interview.  

Executive support is crucial, as is measuring the impact of your philanthropic activities. Calçada is also a strong believer that talent should be able to move freely between the main business and the foundation, and that it should be subject to the same systems, processes, and career development strategies.  

“If you put these activities on an island, you will behave like an offshore and try to be like an offshore. You need to build the bridges so the foundation is deeply connected with your company,” he says. 

A modern foundation 

So how can organizations approach this? Calçada says it is crucial to root your philanthropic goals within your company’s strategy and identity. This avoids the risk of being accused of social washing.  

Before joining the Repsol Foundation in December 2018, Calçada held a variety of executive roles, including being a member of the Downstream Executive Committee, CEO of Repsol Commercial, and Chairman of Repsol Portugal. This understanding of the corporate side of the business has helped him shift the foundation away from traditional corporate philanthropy to a model that does good by investing in impact ventures that have the potential for scale.  

Rather than “just” donating money, the foundation acts like a seed investor or startup incubator, identifying innovative solutions that can address society-wide problems. Specifically, the Repsol Foundation invests in four areas that are critical to the energy transition: carbon offsetting, sustainable mobility, circular economy, and energy efficiency. 

By identifying and scaling new technologies, Repsol is using its corporate clout to help not only tackle climate change, one of the thorniest problems facing society today, but also create new sources of livelihood for the communities involved in the entrepreneurial initiatives. It will also potentially help the oil and gas major uncover new solutions to help it fulfill its commitment to achieve net zero emissions by 2050. 

So far, the foundation has invested in five startups (see box). It views itself as an asset manager and expects business plans and accountability. When choosing investments, it screens startups or young companies operating in four priority areas and looks at their potential for scale. The goal is for them to be economically viable within a few years, while also having a social and environmental impact. 

Scale and speed 

As a large organization, the advantage of putting these activities within a separate foundation is that it disentangles them from the bureaucracy that can sometimes hamper progress. “If you keep scaling up a bit separate from the mainstream, the first thing you get is speed because you are not embedded in the very long processes of decision-making,” he says. 

In addition to these five investments, Repsol Foundation has an Entrepreneurs Fund, which acts as an accelerator for energy transition startups. Over the past decade, they have accelerated over 70 startups worth over 450 million euros, as well as provided mentoring for entrepreneurs. Some 80% of the businesses that have received funding still exist today. 

Repsol’s philanthropic activities aren’t limited to impact investing, however, with the foundation taking a holistic approach to encourage collaboration across business, academia, and education. It has created a digital platform, Open Room, for debate around the energy transition and an educational platform, Zinkers, which aims to do the same in schools across Spain, as well as funded five University Chairs. It also encourages its employees to volunteer to help contribute to a fair and inclusive energy transition. Such a multi-stakeholder platform has the potential to accelerate our transition to a more just and sustainable society.  

Calçada stresses that he has not reinvented the wheel at Repsol, but rather taken inspiration from some of the best foundations worldwide that are admired for their impact. 

For others looking to take a similar route, he encourages them to start by identifying the key issues that matter to their stakeholders, as that is where they can usually have the biggest impact. Leading with purpose as a compass also helps to take away some of the risk, he adds. “Sometimes we are more worried about the problem than thinking about the solution.” 

With the world desperately needing systemic change to address longstanding social inequality and environmental challenges, the foundation model could help to spur faster progress. 

“We need a better world with much more sustainability,” he says. “Not in PowerPoint slides, but in real life.” 

The Repsol Foundation’s investments 

Carbon offsetting
Grupo Sylvestris - Motor Verde is a large-scale reforestation project in Spain and Portugal promoted by Repsol Foundation and Sylvestris. The aim is to compensate 16,000,000 tons of CO2 by reforesting 70,000 hectares in Spain and 25,000,000 tons of CO2 and 100,000 hectares in Portugal in particular wasteland or areas that have been affected by fires by planting native species. At the same time, they plan to create thousands of jobs in rural areas.
Sustainable mobility
KOIKI – A sustainable last-mile delivery service, which delivers packages in cities by foot or small electric vehicles and increases employment opportunities for vulnerable groups. Some 200 people are currently employed in 80 centres across Spain and more than 900,000 packages have been delivered in a sustainable way, avoiding 348 tonnes of CO2.
Circular economy
Recycling4all – The company recycles electronic devices and turns them into new parts, helping to protect resources. There are currently 12 centres in Spain where more than 160 employees work. which integrate people with disabilities into the workforce. It has processed 14,800 tonnes of waste in one year and 90% of the materials recovered are used in circular production.
Energy efficiency
Hispaled – Experts in LED technology solutions for public lighting to reduce CO2 emissions. It has a job placement program for young people in vulnerable situations. GNE Finance works on the eco-sustainable rehabilitation of housing, especially in vulnerable environments, reducing CO2 emissions and improving people’s quality of life.
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Authors

Sophie Bacq OWP

Sophie Bacq

Professor of Social Entrepreneurship, IMD

Sophie Bacq is Professor of Social Entrepreneurship at IMD. She is a globally recognized thought leader on social entrepreneurship and change. She investigates and theorizes about entrepreneurial action aiming to solve intractable social and environmental problems, at the individual, organizational, and civic levels of analysis.

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