Business: Profits & More
The term Social Entrepreneurship encompasses any business that develops solutions to address any social, cultural or environmental issues. It is about creating the right impact in the needed direction. The term has picked up fast in the last 10 years, though I am sure it has existed since forever.
The SDGs given by the UN addresses all the challenges that the world is facing today, keeping sustainability at its core. Any business whose model strives to achieve any of the SDGs is a social enterprise. And that’s what the World needs most today.
Today the world and I talk specifically in the Indian context, is blossoming with such Enterprises. The key focus of these enterprises is to make a difference, create an impact in a manner that improves the quality of life, the quality of environment which is actually leading to a better country; a better world.
These enterprises should not be mistaken as NGOs or non profit organisations. A social Enterprise is specifically a Business for Profit, where the basic framework is about bringing a change to the society, with sustainability as the nucleus.
This also has become the focus area for a lot of corporates as well. In fact, through this, we hope to create a platform for discussion and inputs on how existing businesses and big corporates can weave in sustainability in their business model, make an impact in a profitable manner.
It starts with the commitment that my business will not harm the environment. Even if the existing model has been the same, there are now ways to modify the processes to stop/reduce that harm. There is a strong government focus on the same.
Keeping the 17 SDGs in mind while making policies, processes and having the flexibility to bring the change in how we do business will form the way.
Even before SDGs, in 2005, the UN had come up with the Environment Program Initiative and gave us ESG – Environmental, Social and Governance. Environmental, Social, and Corporate Governance (ESG) is an evaluation of a firm’s collective conscientiousness for social and environmental factors.
Infact practice of ESG investing began in the 1960s as socially responsible investing, with investors excluding stocks or entire industries from their portfolios based on business activities such as tobacco production or involvement in the South African apartheid regime. This can be exemplified in todays practice of people boycotting usage of such products.
There is growing evidence that suggests that ESG factors, when integrated into investment analysis and portfolio construction, may offer investors potential long-term performance advantages.
This may call for spending more resources by the organization, in terms of using products or raw material that is environment friendly, hiring resources that have expertise and required skill to drive the intent.
And even if it may be difficult to change the existing modus operandi, the new businesses, products or divisions that the corporate chooses to invest in can have sustainability as the guiding factor.
Investing or promoting in other SMBs that are working in this direction can be another way for a corporate intending to become a social enterprise. Doing business in a Socially responsible Way is the way forward and that’s what a lot of corporates have already adopted.
I reiterate this is not CSR, but doing Business for Profit. Going forward, that will be the only way to do business. Let me explain this with the example of Electric Vehicles in India. The transition to electric vehicles was envisaged long back – starting with government policies, directives, signing treaties. Manufacturers were given ample time for the transition. Government started putting efforts towards creating an ecosystem where electric vehicles will take over the conventional fuel vehicles.
And here we are in 2022, where I have met so many people who have postponed their vehicle purchase because they are sure that in a year or so we will have better options with Electric vehicles in the market, there will be more number of electric charging points available, they will buy their next vehicle then – and I happen to one such person. To make this shift – all it needed was a strong intent by the government supported by the corporates with the willingness to execute the change and a society that is now a huge market for sustainable products.