It’s easy to be cynical about business. When a consumer giant like Amazon can court enormous tax breaks whilst openly abusing its employees, ‘corporation’ begins to sound like a four-letter word. Thankfully, there are literally hundreds of thousands of social enterprise companies in the UK alone who prove that business can be a powerful force for good. Whether it’s providing care to people living with disabilities, or employing those who might otherwise struggle to find work, these companies are founded on one unifying principle, to change the world for the better.
Many firms, big and small, engage in ‘corporate social responsibility’ or CSR. This practice ensures that their impact on our society, economy, and planet, remains positive on the whole. Although CSR offsets some of the harm that large multinationals do, it can often appear tacked on or insincere. German car manufacturer Volkswagen is especially guilty of this. Infamously, it claimed to ‘pursue’ sustainability, all the while falsifying emissions tests in a scandal that saw it lose billions of dollars. While Volkswagen claims to have learned from its ‘mistake’, dozens of other conglomerates have come under recent scrutiny over failures in CSR.
By contrast, social enterprises put the common good at the forefront of their business model. Greyston Bakery in New York, for instance, strives to break the cycle of poverty for homeless people, recovering drug addicts, and ex-offenders by offering them work and subsidised housing. These workers then go on to bake the brownies you might find in a tub of Ben and Jerry’s ice cream.
Closer to home, Affordable Justice Ltd provides high-quality legal representation to women who wouldn’t normally be able to afford it. Based in Hull, this enterprise shares its substantial expertise for less than a third of the commercial rate for lawyers. Specialising in family law, the firm is acutely aware of the difficulties that vulnerable women face when seeking legal help – especially if they’ve been subjected to financial abuse.
As you might expect, this kind of business doesn’t come easy – or cheap. A common barrier to investment is the perception that social enterprises are merely charities that can’t pull their weight when it comes to quality or efficiency. Thankfully, these fears are largely unfounded – SEs are businesses through and through. That self-same drive to do good leads to them frequently outcompeting their peers. In fact, 2017 saw them turn a profit 16% more frequently than ordinary companies of similar size.
With more consumers prepared to pay a little extra for ethical, sustainable, and locally-sourced products, the future has never looked quite so promising for social enterprises. Indeed, if you’re a budding entrepreneur, there’s a one-in-four chance you’ve considered starting one yourself. As this number grows, investors will have no choice but to start taking the concept seriously and foster a new generation of businesses that not only succeed but inspire success in the world around them.
Dmitry Fedoseev