Social Enterprise and Social Entrepreneurship

Learn about Social Enterprise, Social Entrepreneurs and Sustainable Entrepreneurship.

Fundamental Issues

Over the decades, human activity has resulted in :

High CO2 concentrations in the atmosphere.

Each of the last 4 decades being warmer than their preceding decades.

Large-scale ecological degradation & extinction of species.

Increased frequency & intensity of extreme weather events (Heat Waves, Wildfires, Glacier Bursts, Flooding).

Host of other environmental issues : rising sea levels, melting of glaciers, dead zones in oceans, deforestation, species extinction.

Impact primarily borne by vulnerable & poor communities.

The Covid-19 pandemic was the result of transmission from animals to humans. This could be traced back to humans encroaching upon animal habitats.

Most countries are NOT on track to meet their Paris Agreement commitments.

Average Global Surface Temperature likley to become higher in the coming decades.

No reaction from major Corporations or Governments of major Countries to the latest IPCC report in the days since its release. Does it signal “Business As Usual”?

Human Population Growth. Lack of political will to address issues related to Population Growth.

Overdependence on Fossil Fuels.

Disregarding Science, Evidence & Commonsense:

• Stockholm Conference – 1972.
• “Limits to Growth” – 1972.
• Internal report of Exxon (by James Black) – 1977.
• Brundtland Commission Report “Our Common Future” – 1987.
• Rio Summit – 1992.
• IPCC 6th Assessment Report – 2021?

Disconnect from Ourselves, Disconnect from Others, Disconnect from Nature (“Theory U : Leading From The Emerging Future” – edX).

“Growth at all costs” mindset. Extract – Make – Use – Dispose Business Models.

Not pricing raw materials taking into consideration the millions of years taken for their formation.

Collusion between Business & Government. Lack of Regulations to mandate & enforce change. Net Zero plans based on Technologies that are not yet commercially viable & showing steep reductions between 2040 & 2050, while ignoring solutions that are possible using Technologies available today (“Project Drawdown”). Just postponing taking the deep & meaningful action that is needed. Unfettered Corporate Influence in Government Policies : Lobbying, Corporate Corruption; as an example, Exxon knew as early as the 1970’s that burning of Fossil Fuels had a major impact on Climate Change. Yet, it lobbied for stalling regulations, funded “research” aimed at denying Climate Change. Greenwashing.

Rising Inequality : Transfer of wealth from poor to rich, from individuals to corporates (continued). Highest concentration of wealth by few individuals / corporates in history. Millions lost their jobs & incomes during the pandemic, while the wealth of Billionaires soared. Overbilling of retail consumers by electricity distribution company in Mumbai during the pandemic. Poor, Marginalized & Vulnerable populations pay a disproportionately higher price due to Climate Change.

Dilution of Environmental Norms – Governments in many parts of the world used the opportunity provided by the pandemic to dilute environmental laws : Draft EIA 2020: Post Facto Regularization of Violations. No provision for scientific representation for cognition of violation. Dilution of Public Consultation Process. Ignores cumulative impact with respect to environmental damage. Char Dham Project : Bypassed EIA process by classifying the entire project as 53 separate projects. Keystone Pipeline Project, USA.

The Business Case For Sustainability

The transition to a low-carbon economy is inevitable. It will throw up enormous opportunities for those who can develop the required Technologies, & Innovate around Business Models.

The cost of natural resources is bound to go up exponentially as they become more scarce and difficult to mine. This, in turn, will exert pressure on businesses. Business Models that imbibe principles of the Circular Economy will help alleviate this.

Investors are increasingly taking note of the fact that Climate Change poses existential threats to businesses, & thereby, to their investments. They are increasingly exerting pressure on companies to embrace Sustainability.

While it is too early to tell, as extreme weather events increase & day-to-day life of people gets impacted due to Climate Change, Social unrest will force Governments to bring in appropriate legislation.

Social Enterprise

The term “Social Enterprise” describes the purpose of a business, not its legal form. It is defined as “a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners”.

Social Enterprises aim to make a profit, but rather than keep all the profits, they reinvest or donate all them to create a positive social change.

Social Enterprises too sell their Products & Services in the open market. Their Profits are either reinvested into the business or in the local communities.

Through this, they help tackle Social problems, provide Training & Employment, & provide opportunities for the marginalized & vulnerable populations.

Social Enterprises need to fulfill the following criteria :

• Have a clear social or environmental mission set out in its governing documents.
• Generate the majority of its income through trade.
• Reinvest the majority of its profit.
• Be autonomous of the state.
• Be majority controlled in the interests of the social mission.
• Be accountable and transparent

Social Entrepreneurship

Social Entrepreneurship is the process of recognizing & pursuing opportunities to create Social Value. Social entrepreneurs are innovative, resourceful, and results oriented change agents. They draw upon the best thinking in both the business and nonprofit worlds to develop strategies that maximize their social impact.

Characteristics of Social Entrepreneurs: Contentment, Community roots, Empathy, Creative, Prior Work Experience, Global Exposure, Education.

These entrepreneurial leaders operate in all kinds of organizations: large and small; new and old; religious and secular; nonprofit, for-profit, and hybrid.

Exercises:

• Think of a few Social Entrepreneurs. What about them appeals to you?
• Think of a few Social issues in your neighbourhood. How could Social Entrepreneurs solve those?

Entrepreneurial Change Agents that seek to embed ethical, ecological and good corporate governance into their activities are also Social Entrepreneurs – called Environmental or Ecopreneurship.

Social Entrepreneurship focuses on Sustainable Strategies that generate both Social & Commercial Value.

Sustainable Entrepreneurs

Characteristics of Sustainable Entrepreneurs:

• Economic : the Core Business Model is commercial robust.
• Technological : Technology is a driving force behind the development of the Enterprise.
• Social : they partner with local Communities, help build Capacity & improve Lives.
• Environmental : they encompass a wide range of Environmental issues such as Air Pollution, Waste, Biodiversity, Soil Pollution &
• Fertility, preserving Natural Resources, & Water Pollution.
• Value : their development is tied to creation of a Value Based Society that helps reduce Social Conflict.
• Learning : the Enterprise should create a structure that facilitates learning & knowledge transfer, & encouraging sustainable innovation.

Sustainable entrepreneurs are concerned with Profit, People and the planet. This has been termed as the Triple Bottom line. The Triple Bottom Line aims to measure the Financial, Social & Environmental performance of the company over time.

Summary

• Have a strong Vision & Mission for the company.
• Treat your employees Fairly.
• Shift from Throughput to Circular Economy.
• Avoiding future liabilities … eg, avoiding shifting production offshore or polluting the ground / air / water.
• Conduct business ethically.
• Avoid generation of waste.
• Be profitable / able to sustain the business.
• Think beyond the business, all areas that the business may affect.
• Use regenerative electricity.
• Involve the community.
• Triple Bottom Line

Sustainable Development Goals (United Nations)

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