The stats on social enterprises globally are startling - worth trillions, bigger than telecoms and clothing, 50% led by women, and more
Photo by Steve Johnson on Unsplash
As we have been tracking social enterprise (or “4th sector”) activity for years now, it’s always good to find a concise statement of the impact of initiatives which combine ethical goals and outputs, with a profit stream from products and services that fuels those goals.
Forbes magazine recently ran this piece from François Bonnici, Head of Social Innovation at the World Economic Forum, which - on the basis of a new report - has some stirring statistics
There are approximately 10 million social enterprises worldwide
They collectively generate around $2 trillion in annual revenues
The sector now outranks other mainstream industries by annual revenue, such as telecom and apparel.
The piece reminds us of the distinctiveness of social enterprise:
Social enterprises, which make up 3% of all businesses globally, stand out from traditional businesses by placing a strong emphasis on creating social and environmental value in addition to economic value. Unlike conventional nonprofit organizations, social enterprises are self-sustaining through their business activities. They prioritize social impact over financial returns and reinvest their profits back into their mission.
compared to a mere 20% of conventional businesses.
With the WEF tracking over 470 leading social entrepreneurs, these enterprises alone have already directly impacted more than 891 million lives over the past 25 years.
The article identifies the outdoors clothing company Patagonia and Egypt’s SEKEM as exemplars of the effect that social enterprises can have:
Patagonia demonstrates how a company can prioritize environmental and social impact alongside profitability. While committed to sustainability and fair labour practices, Patagonia’s revenue has been consistently growing throughout the years. The company has an estimated value of about $3 billion and brings in $100 million in revenue annually. All profits are now going to a specially designed trust and nonprofit organization to combat climate change and protect undeveloped land around the globe.
SEKEM was established in 1977 as a farm operation, reclaiming 170 acres of desert on the outskirts of Cairo. It aims to facilitate the transition of 40,000 smallholder farmers to organic and biodynamic farming, producing organic foods, herbal teas, medicines and sustainable cotton. Through concerted efforts, SEKEM cultivates a future where sustainability isn’t a lofty goal but a tangible reality.
Generating revenues of $23 million in 2022, it also generated 53,705 end-of-life carbon credits along with 2,500 farmers and SEKEM farms, competing as an industry leader in the Middle East’s herbal and organic foods and medicine sector.
In April 2023, the United Nations General Assembly adopted the first Resolution on the Social and Solidarity Economy to highlight the contribution of cooperatives, social enterprises and other social economy organizations to realizing the SDGs.
Yet, only one in five countries has legal structures or specific legislation to support social enterprises.
Movements such as Catalyst 2030 are working with social entrepreneurs worldwide to advocate for better policies to support the social economy. For example, last November, the Schwab Foundation and Catalyst 2030 Brazil co-hosted a high-level roundtable at the Ministry of Development, Industry, Commerce and Services in Brasilia, discussing actions to unlock the social impact economy in Brazil alongside the launch of the “Enimpacto” presidential decree to invest in and advance its impact in the country.
More here. And the State of Social Enterprise Report 2024 is here.