Bold ideas to create jobs and solve real city challenges

NYCx will open urban spaces as test beds for new technologies.

Through NYCx, the City of New York engages the tech industry to solve real-world problems and call on the tech vanguard to make NYC the most fair, equitable, and sustainable city in the world.

  • Co-Lab Challenges invite startups and entrepreneurs to work directly with community residents to solve neighborhood challenges while aiming to scale solutions for common issues for all New Yorkers.
  • Moonshot Challenges encourage global entrepreneurs to think big about NYC’s most ambitious problems, propose bold solutions, and deliver groundbreaking business models that transform and improve the lives of city dwellers globally.

Thanks to a partnership with The Boston Consulting Group, Bain & Company, and a team of skilled volunteers, Civic Consulting USA is a key part of of this new program.

A diverse group of technology and community luminaries are guiding NYCx, including:

“NYCx will transform the relationship between city government, community and the tech industry to be more collaborative and inclusive,” says Miguel Gamiño, Jr., New York City Chief Technology Officer.  “If we can test and solve critical challenges together in NYC and achieve our City’s goals, we can offer these solutions for other cities facing similar issues.”

Delivering on the bottom line ASAP

Can private equity be a driver of positive change for the environment, social justice and healthy institutions?

Civic Consulting USA says “Yes!”

In the investment community, environmental and social impact considerations are often abbreviated as “ESG,” which is short for “Environmental, Social, and Governance” factors.

There’s an increasing body of practice and research demonstrating that social impact considerations can drive bottom line returns for large, publicly-traded companies.

In fact, it is now common for pension funds and institutional investors to say that ESG considerations are important for long-term returns in the public markets. As Swiss Re Chief Investment Officer Guido Fuerer said, “Equities and fixed income products from companies and sectors with high ESG ratings have better risk-return ratios.”

However, in contrast to pension funds and endowments, which think decades ahead, private equity firms typically seek to deliver transformational value from the companies they control within just a few years. To date, the shorter-term focus of private equity firms has precluded most ESG or social impact considerations, particularly in the lower and middle market.

Until recently, only the largest publicly-traded private equity firms, such as Blackstone, KKR, or Carlyle, have had access to the financial and social benefits of ESG analysis. Due to their scale and public reporting requirements, such firms have dedicated teams to ESG due diligence and ESG board oversight. For these firms, it began as a risk-management function and good corporate housekeeping. However, it turned into a major source of value creation at their portfolio companies.

Strong ESG programs are driving customer satisfaction, brand equity, operational efficiencies, and happier, more productive employees – with combined EBITDA benefit in the tens of millions. These large firms have also taken millions of metric tonnes of carbon from the air and saved billions of gallons of water.

We believe these “double bottom line” benefits can spread to the middle market.

“We’re now seeing quantifiable examples of ESG initiatives delivering significant EBITDA value,” says ESG Portfolio Partners Principal Ted Knudsen. “Waste diversion, supply chain resilience, employee engagement, and productivity – these are all ways that the large cap PE firms are turning ESG into value for their LPs.”

Why is this important to the rest of us?

For one, US ranked 42 out of 45 OECD countries on the UN’s assessment of sustainable development. That means Americans live with greater inequality and pollution than our peers around the world.

Secondly, the companies owned by private equity grew jobs nearly three times as fast as other companies. In fact, these companies represent the second largest source of private-sector employment in the country. Changing the mindset of private equity investors has tremendous potential to affect millions of Americans in every city and community.

Third, private equity firms typically hold onto their investments for less than six years. New paradigms can take root quickly and yield benefits for American families before kids currently in middle school graduate from high school.

“If private equity firms in America take up ESG as global counterparts have, it will drive far larger and faster improvement in energy efficiency, gender equity, and fair wages than any current government regulatory effort,” says Alexander Shermansong, CEO of Civic Consulting USA. “PE firms have the money and the control over company boards to make world-changing progress on these collective impact issues in just three to seven years.”

Civic Consulting USA is committed to original research, developing toolkits and best practices, and providing custom-tailored guidance for private equity leaders. Our data-based approach will help the industry better quantify their positive societal impact for reporting to all stakeholders: investors, governments and the general public.

Unlocking the potential: A case study of affordable housing and cross-sector partnership

Nearly one in fourteen New Yorkers live in apartments managed or subsidized by the New York City Housing Authority.

But with disinvestment from all levels of government, NYCHA has been unable to keep homes in good shape and to connect residents to community resources and economic opportunities.

“Aggressive action is necessary to deliver to NYCHA’s residents the resources and services they have long deserved, and to sustain the Authority for the long term,” according to NYCHA Chair Shola Olatoye. Therefore, NYCHA developed a long-term plan to change fundamentally how they operate in order to create safe, clean, connected communities.

In the midst of planning, the non-partisan nonprofit Civic Consulting offered pro bono assistance. And the first area of collaboration has been to develop a ground-floor leasing strategy.

courtesy LEVENBETTS 2015

With 328 developments around the city, NYCHA has tremendous space on the ground floor, in fact, 2.5 million square feet that’s non-residential. Roughly a tenth is zoned commercial, and those storefronts enjoy very low vacancy. The other spaces are often under-utilized or off line altogether: former laundry rooms, management offices, community centers, storage, and more.

As NYCHA leadership – including the Chair and the Vice President of Real Estate Services – discussed these assets with Civic Consulting, it became clear that NYCHA alone did not have the resources to repair and reprogram these spaces. New partnerships would be needed.

The question is, who has both the interest and the resources to unlock the potential of these spaces?

Read the case study (PDF).

How can you think long-term when you’re dealing with a deficit?

How do you upgrade millions of square feet of public housing?

Can going to public hospitals to get treated become a positive experience?

At the Meeting of the Minds, Alexander Shermansong moderated a keynote conversation around “Local Answers for Under-Resourced Cities,” with two of his New York collaborators, Karina Totah, Senior Advisor to the Chair at New York City Housing Authority and Steven Newmark, Senior Policy Advisor & Counsel to Mayor Bill Bill de Blasio – two forward-thinking government change-makers.

The conversation speaks to how pro bono services can enable city government to implement lasting solutions, leading to meaningful impact for millions of people.

“When you constantly deal with a deficit, the idea of trying of being forward-thinking and thinking long-term becomes more difficult to do,” says Steven.   “That’s really when you need to bring individuals that can cross those sectors, that can bring those agencies, external experts, and staffers together.”

See the recorded webcast.