Is the social enterprise coming of age?

Latifa Kapadia Corporate Sustainability, PwC United Kingdom 18/11/19

As we mark Social Enterprise Day this week, I’ve been reflecting on the journey social enterprise has taken since it all started, with the establishment of Social Enterprise UK (SEUK) in April 2002. Now, nearly 18 years on, is the ‘social enterprise’ coming of age? 

Recently, we’ve seen a huge growth in businesses that seek not only to contribute to the economy through the supply of goods and services, but also want to use their resources to tackle deep-seated societal problems - such as inequality and exclusion, and the impact of accelerating climate breakdown. 

A recent report by SEUK found that the social enterprise sector contributes £60bn to the UK economy (up from £24bn two years ago), spanning a wide range of sectors from education, hospitality and retail, to social care, consultancy and financial services. It also reveals that social enterprises outperform small companies using a traditional business model, with over half (52%) growing their turnover in the last 12 months, and 56% introducing a new product or service. 

But social enterprises are not just commercially effective. They’re delivering better social outcomes, too. Three-quarters of them pay the Living Wage and many provide employment to disadvantaged groups, making society more inclusive and cohesive. Further, the same proportion see environmental considerations to be at least as important as cost in their procurement decisions. 

So what’s behind the growth of these social enterprises over the years? You only have to look at the number of new websites devoted to promoting ethical consumer choices to see there’s been a surge of interest from more socially-conscious consumers. But I think it’s more than just market demand. 

Is it that social entrepreneurs demonstrate a belief in individuals typically excluded by society, by employing them, as opposed to giving them handouts? Are these employees more inspired, dedicated and productive? Or it could be that the lean, grassroots nature of these businesses makes them more agile and more able to adapt to the local economy in which they're working than other types of business. 

Drawing from the many social entrepreneurs I’m lucky enough to meet, it strikes me that they often address societal problems they have either experienced themselves or have been passionate about from the outset. It’s clear this personal sense of purpose fuels their daily commitment.

NEMI is a tea company that supports refugees into employment. We stock their tea in client spaces across our London Offices.

NEMI is a tea company that supports refugees into employment. We stock their tea in client spaces across our London Offices.

It’s a spirit that we see in a new type of ‘business with a conscience’ - B-Corps. Like social enterprises, these organisations are values-driven and prioritise social and environmental outcomes. Having launched in the UK in 2015, there are already 193 including household names such as Innocent, Teapigs, Able and Cole and even Danone. For example, I recently attended a meeting with a potential B-Corp supplier who’s in his early years, and has a determined belief that there’s a better way to do business. He told me that, in his mission to be kinder to the environment, he turned away a much-needed client whose primary focus was cost, choosing instead to work with like-minded businesses who want to maximise their societal as well as their economic value. 

I believe that these new models of enterprise play an important role in demonstrating that purpose and profits can work in tandem. And it’s an idea that seems to be catching on in big business, too, with a ground-breaking update to the principles of corporate governance by the Business Roundtable in the US earlier this year, signalling a shift in focus from ‘shareholders’ to ‘stakeholders’. Signed by the CEOs of 181 leading companies, including PwC, it builds on the heritage of social enterprises and perhaps heralds change at a scale and in a way that can amplify the benefits of business as a whole, creating ‘good growth’.

PwC has been working with social enterprises for over a decade. This not only aligns with our purpose - to build trust in society and solve important problems - it demonstrates our commitment to being a responsible business. Through our Social Entrepreneurs Club we support over 250 social enterprises with free access to our business, finance, marketing and technology skills, and in return we benefit from unique learning opportunities for our people. And we procure products and services from over 60 social enterprises as part of our Buy Social commitment, providing them with a steady income and valuable experience of working with large businesses as customers. In turn, they inspire us all with their stories of striving to do better, and innovating for the common good. 

Having come of age, perhaps this new generation will show us all how it’s done. 

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Organic Blooms is a flower grower and florist that provides training to people with mental health issues and support needs. They supplied our table decorations at a recent client event.

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Latifa Kapadia

Latifa Kapadia

Corporate Sustainability, PwC United Kingdom

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