Позитивные изменения. Том 3, № 4 (2023). Positive changes. Volume 3, Issue 4(2023)

Social Enterprises (SEs) are businesses that, like any commercial entity, generate revenue through the sale of goods or services. However, they are distinct in their core mission: to address social and/or environmental issues. This mission is fundamental to their operations, and unlike traditional businesses, social entrepreneurs prioritize their mission over profit. For instance, SEs consistently reinvest a portion of their profits to achieve social or environmental objectives.

Wan Dazriq, co-founder and managing director of PurpoSE Malaysia, points out that the concept of social business is often misunderstood by society and government alike. If the primary goal of these enterprises is to address social issues, why the need to generate profit? Why not operate solely as non-profits? Unlike non-profit organizations, which often rely on grants, donations, and sponsorships, social enterprises aim for self-sufficiency and stability. Thus, they represent another crucial sector of the economy (other than NGOs), capable of influencing the global social and environmental landscape.

“Ultimately, social entrepreneurs’ aim is to better the world, making profit a means to an end rather than the goal itself,” explains Wieteke Dupain, CEO of Euclid Network, Denmark. “Currently, only 10 % of European companies are social enterprises. Our objective in the coming years is to double this to 20 %. Achieving this requires funding – we need to invest in and develop social enterprises. And for this growth, these enterprises must also generate and reinvest their earnings.”

Jerry Higgins, founder and managing director of the Social Entrepreneurs World Forum, notes that despite significant progress in the last 30 years, we cannot yet claim a global transformation towards social responsibility in business. However, social enterprises are increasingly becoming a trend. The mindset, especially within the business community, has evolved to recognize the importance of not just financial capital but also natural, social, and cultural capital.

“Social entrepreneurs are crafting significant values beyond profit,” Higgins elaborates. “Their work underscores the worth of human life and dignity, resonating deeply with contemporary societal values that are increasingly being recognized and emphasized.”

CARING FOR THE PLANET

Social enterprises are champions of the circular economy, emphasizing resource renewal, recycling secondary materials, and shifting from fossil fuels to renewable energy sources. These initiatives demonstrate social entrepreneurs’ commitment to conserving planetary resources and prioritizing public health. For example, they avoid using ingredients and materials harmful to humans and the environment, minimize unnecessary transport, reduce waste production, and recycle what is already available.

Take Fairphone, a Dutch company deeply concerned about the growing problem of electronic waste, which is increasing faster than any other type of waste. Annually, 1.4 billion smartphones are sold, each with a lifespan of just two to three years, and merely 20 % of these devices are recycled. Monique Lempers, Fairphone’s Impact Innovation Director, attributes this issue partly to the economic models of many businesses, which push for higher sales by convincing consumers to replace phones that are still functional. This trend harms the planet through excessive resource consumption and results in toxic waste affecting people and wildlife. Fairphone addresses this by manufacturing smartphones from recyclable materials and designing devices for reparability.

Social enterprises are champions of the circular economy. They minimize unnecessary transport, reduce waste production, and recycle what is already available.

Another Dutch initiative, 2050 Factory, tackles textile waste. According to founder Naz Kawan, too much fabric is produced and excess is discarded. 2050 Factory seeks out surplus fabric from other manufacturers, reducing the need for new production, and repurposes it. Similarly, Roetz, another Dutch company, produces bicycles from scrap metal, recycling old and discarded bikes.

Hester Van Buren, Vice Mayor of Amsterdam, notes: “Due to the climate crisis, business as usual is no longer viable. Companies must mitigate their environmental impact. Unfortunately, many still expand at the expense of nature and human well-being, disregarding the finite nature of our planet’s resources. To change this trajectory, we need fundamental shifts in how we work, produce, consume, and travel. Innovation, mutual care, and respect for nature are key. Social entrepreneurs are at the forefront of this change.”