Doubts around social enterprises have disappeared, leaving a clear path to sustainable ESG (Environmental, Social and Governance) procurement goals in an era of huge change for Corporate Social Responsibility programs.
Social impact activities are typically measured by their social value instead of the underlying business value within. Income inequality, diversity, and the environment are how companies usually measure the success of their social initiatives. This hinders the management’s decision to effectively weigh CSR initiatives against other business needs.
The private sector is facing huge change driven by the climate change crisis and Covid-19, and there is now an added urgency to setting ambitious ESG goals. Lessons from the COVID Response Alliance for Social Entrepreneurs at the World Economic Forum can help social procurement strategies deliver more beneficial results in achieving ESG objectives combined with strategic CSR initiatives.
The alliance, made up of 85 foundations, corporations and intermediaries, including SAP, Unilever and IKEA, has dispelled doubts about the functioning of social enterprises and their ability to measure and implement large contracts and their special sectors, fostering support from worldwide businesses.
The Acumen non-profit investment fund report, supported by IKEA Social Entrepreneurship and Impact Measurement Company 60 Decibels, provides insights based on a global survey of more than 150 social enterprises from 43 countries and various other industries.
The report shows:
75% of the social enterprises surveyed combined their impact measures with the UN’s Sustainable Development Goals
According to a 2021 World Economic Forum study, only 38% of mainstream companies were on target.
Social enterprises are designed with social and environmental goals at their core. Cooperation between companies can provide more than just a social impact – cooperation can mean big and lasting change. The Yunus Social Business’ The Social Procurement Manual found that 55% of companies surveyed also cited non-financial collateral benefits, such as business model innovation, better market capital, and improved employee involvement in social enterprise collaboration.
With an estimated annual worldwide expense of $13 billion, this is proof that this model will transform companies in the foreseeable future. However, while social enterprises can be effective partners in achieving the objectives of ESG enterprises, enterprises themselves must first overcome some of the structural barriers that traditional enterprises present.