It’s a fact that doing what’s best for the company is the goal of any business. The decisions taken, the people that get hired and the strategies that are rolled in or out depending on results. Aside from the business-centered decisions though, companies, and especially startups, have started to realise that their employees respond to social and environmental impact actions.
In the past few years we have seen an increase in startups speaking about and taking action on environmental problems like sustainability and climate change, as well as social injustices like non-inclusive or low multicultural representation in companies.
These more sustainable and equal work policies are all a great starting point. But it’s important to note that social entrepreneurship goes further than just a marketing trick (like planting trees as part of a short-term campaign) or a singular company policy on diversity. Social entrepreneurship is an environmental or social mission embedded into the main objective of the company, for example providing banking services in poorer areas or setting up a company to help children orphaned by disease. Social entrepreneurs are not motivated by profit (although they must be financially savvy to succeed); instead, social enterprises measure their success by impact made, and re-invest their profits back into the business to do more good.
So with all this in mind, here are some reasons why now is the best time for social entrepreneurship.
- To make the world a better place
Simple and to the point. If you invest time and resources on any social or environmental impact project you want to put your two cents (and hopefully more) in making the world a better place.
Millennials and Gen Z are known to be more socially responsible and sustainable, thus the increase of startups and organisations that fight climate change and act on social matters.
We’re going through complicated times, but it’s in moments like this when we get more creative, responsible and willing to help. If the COVID-19 pandemic has taught us anything is that we’re all connected, and we will only get through it if we act together. Metaphorically speaking, something similar has to be done to address and act on the social injustices and environmental issues on this planet.
2. Give a voice to everyone
May was a month that opened the eyes of many people in the United States, but also globally, on racism and social injustices. The death of George Floyd started a wave of protests in the US and around the world to fight for the lack of equality and the social injustice that black people go through each day just because of their skin colour. The Black Lives Matter movement served as a starting point to fight for respect, equality and recognition, and put an end to racism.
It’s important for startups to stand by these movements, but it’s even more important to act on them. Changing the photo on all social media accounts for a few days is a nice gesture, but one that doesn’t contribute much to the cause. Instead, make sure that your company supports organizations that fight for these injustices and adapt an all inclusive recruitment process.
An inclusive and multicultural team gifts companies with different life experiences, backgrounds and points of view that can be the company’s strong suit, a way to attract new talent and enrichment for the team members themselves.
3. Grab attention from investors
We have a wide range of sustainability challenges, and investors are starting to re-evaluate traditional portfolio approaches to give more importance to funding sustainable projects. Sustainable investing considers environmental, social and governance (ESG) factors that create a positive and lasting impact on the world. To say it simply, it’s putting money into projects and ideas that do good in the world.
There is still a long way to go, but as more people become aware of the problems, the investment into ESG projects continues to grow. We can see it in number;, in 2012, around €7.3 trillion were invested in Europe, while just 6 years later we have nearly doubled the number to €11.8 trillion in 2018.
Many of Europe’s major economies, like France and most of the Nordics, have adapted new regulations (Like the Energy Transition Law, in France) and cultural shifts that are shaping the landscape of sustainable investing. In the UK, the government has introduced a social investment tax relief (SITR) scheme for investors funding social enterprises.
4. Gain clients
This is something that we can thank millennials, and also Gen Z’s for. Nowadays, the general public are more aware of social injustices and environmental problems. They are open and willing to spend a little more money on products or services if that means helping others or the world in some way.
Environmentally friendly startups that offer products and services that contribute to making the world a more sustainable place are on the rise. Starting a business that helps clean the ocean, reduces food waste or is made out of recycled materials is looked at differently by many buyers that, little by little, are changing the way they buy and consume, driven by the need to act on climate change for a better and more sustainable future.
5. It connects you to a live purpose and keeps you motivated
Having social impact built into your business model adds a plus to your business and the people involved in it. It’s connecting your brand’s ‘why’ to ‘how’ it can be used to help make the world a better and more equal place. It can go from creating a product or a service that has a direct impact, or collaborating with third-party organizations that stand by your brand’s positioning, morals and beliefs.
The positive aspects of social entrepreneurship can be added to almost any idea or project, meaning that we are all potential social entrepreneurs. At the end of the day, it comes down to creating something and going the extra mile to not only help a group of people, but create a real and lasting impact on people’s lives.
If 2020 has taught us something, it’s that anything, good and bad, is possible. It’s a tough year, but it’s in moments like this that the wheels in our heads start to turn and great ideas and projects come out of them.
We live in a world that is starting to wake up and realise that climate change is an issue, that racism is still alive and equality is not always served. Social entrepreneurship comes into the picture to put an end to all of these and make the world a better place. A social entrepreneur is not just someone that does good while doing business – it’s a lifestyle, a mindset that comes down to doing what’s good in an organisation, no matter the size of it.