In my colleague David Alcock's podcast series,'More than the bottom line', David and Emma Watt talk to Daniel Brewer from Resonance about ethical investing and how it can make an impact. The podcast is a valuable and thought provoking piece. In it, Daniel tells us the story of how his desire to not prop up a system of capitalism that has created an ongoing culture of dependency led to the birth of Resonance as a fund with the mission to invest in a way that created a social impact.

Resonance's clear mission is to fund social enterprises in a way that can bring lasting and not just immediate change. In articulating this mission statement Daniel differentiates between simply measuring the bottom line of profit and the social return such investments can make.

As a corporate lawyer specialising in buying and selling businesses and in helping entrepreneurs invest in businesses it struck me that there is often very little care taken in measuring the social and cultural impact of a business. Many hours are spent in looking at legal detail and the all important bottom line but little time spent on looking at the social purpose of a business and its impact in the community it serves.

As someone who works for a business driven by a social purpose and having therefore seen first hand the positive impact that having a purpose can have on a business and its performance I would argue that understanding the social impact of any business and its driving purpose should be something that is central to any sale or purchase transaction and form a part of any due diligence investigation.   

If therefore, investors, entrepreneurs and those acquiring businesses want real lasting success I would argue they should start from a base of realising the value of a real social purpose and measure how such purpose is central to their business or that which they are to acquire rather than valuing what they can measure in pounds and pence.