The role of social enterprises in driving sustainable development goals is of paramount importance. The Schwab Foundation’s Global Alliance for Social Entrepreneurship reports a staggering 10 million social enterprises worldwide, generating around $2 trillion in annual revenues and creating over 200 million jobs. These enterprises are distinctly focused on creating social and environmental value, in addition to economic value, prioritizing social impact over financial returns, and reinvesting profits back into their mission.
An admirable characteristic of social enterprises is the leadership within these ventures, with half of them being led by women, in stark contrast to the 20% of conventional businesses. This underscores the inclusivity and diversity inherent in these enterprises, both in their structure and their goals. This diversity is evident in their global impact, positively affecting the lives of millions of people across the world.
Prime examples of the power of social enterprise include Patagonia and SEKEM. Patagonia has consistently grown its revenue while prioritizing environmental and social impact, redirecting all profits towards combating climate change and protecting undeveloped land around the globe. Meanwhile, SEKEM aims to facilitate the transition of smallholder farmers to organic and biodynamic farming, producing organic foods, herbal teas, medicines, and sustainable cotton. Both these enterprises have made a substantial impact on their communities and the environment, demonstrating the potential of social enterprises to drive positive change.
Despite the significant contribution of social enterprises, they are still not being fully recognised and supported. Many countries lack legal structures or specific legislation to support social enterprises, and there is a significant funding gap of $1.13 trillion. Initiatives like Catalyst 2030 and movements such as People and Planet First are working to advocate for better policies and funding to support the social economy.
The engagement of the private sector is critical in bridging this funding gap. The Schwab Foundation’s Global Alliance for Social Entrepreneurship, in partnership with Deloitte, has launched the “Corporate Social Innovation Compass” to guide companies in partnering with social entrepreneurs, presenting over 10 engagement mechanisms and tangible case studies illustrating the business benefits of such partnerships.
Furthermore, initiatives like People and Planet First aim to create a shared identity for social enterprises and encourage consumers, businesses, and governments to purchase from these entities. These actions are essential to increasing the recognition and contribution of social enterprises towards sustainable development. By providing greater visibility, policy support, and engagement from the private sector, social enterprises can transition from being the world’s best-kept secret to becoming trailblazers of an inclusive and sustainable economy.