Is big business appropriating social enterprise?

Social enterprise has made it to the main stage. Companies from Unilever to Coke are embracing the concept and even starting their own enterprises.  Speakers at last year’s Skoll World Forum on Social Entrepreneurship included representatives from Marks & Spencer, Cisco, Pepsico and Nike. But is this burgeoning interest a good thing?

Social enterprise and big business:

Where do multi-nationals and social enterprises intersect? Let’s take a few examples:

• Unilever’s Shakti programme works with over 80,000 individuals and covers 135,000 villages in India.
• Proctor and Gamble’s PUR water tablet, though distributed on a cost-recovery basis, which survived by the company’s own admission because of the intangible benefits of market research, good PR, employee engagement, and other benefits that supported its for-profit business.
• Danone, through Danone Communities, owns or co-owns a number of social enterprises, including Grameen-Danone Foods in Bangladesh.

(To be clear, for the purposes of this blog “social enterprise” is distinct from inclusive or ethical business. As Social Enterprise UK puts it, “A social enterprise’s primary purpose is its social and/or environmental mission – it tries to maximise the amount of social good it creates balanced against its financial goals.  An ethical business however, attempts to minimise its negative impact on society or the environment.”)

Appropriation or enhancement?

There are two ways to look at the growing intersection between big business and social enterprise:  first, as a representation of the appropriation of social enterprise ideals, one that may in the long term dilute the “social” aspirations of social enterprise, or, alternatively, as a sign of the welcome mainstreaming of social enterprise.

The argument for the first perspective is that established companies could use the positive implications of social enterprise to enhance brand equity without substantially alternating core business practices- the same whitewashing or “greenwashing” critique that corporate social responsibility and sustainably initiatives have long been subject to. Aidnography put in well in the blog “Is Coca-Cola a Social Enterprise Now?” by noting:

 “…as these and other companies seem to discover the world of ‘development’, we should not overlook their negative impact on some of their original, Western markets and societies…Because after all it is about marketing and creating a brand image without jeopardizing the core business model and ‘bottom line’ of revenues.” 

In other words, Coke and others have little to loose in making a small investment in social enterprise initiatives while maintaining standard policies around sugar sourcing, water usage, or other activities much more directly linked with their main business, all of which have huge social and environmental impacts.

Conversely, there is initial evidence that multi-national’s support of social enterprise- whether appropriation or not- does lead to increased social impact. For instance, Shakti claims that women’s sales can double household income and that their i-Shakti programme provides access to information through 3,500 e-kiosks.   If this level of impact can be generalized, than this may be one trend social entrepreneurs should welcome with open arms. 

Equally crucial, the inclusion of social enterprise within the agenda of these huge multi-national’s may signal a shift away from niche market initiatives to something that can be scaled up to a really significant level.   Few social enterprises- with the possible exception of well-established micro-finance institutions such as Grameen- have really made it to scale. Bringing business on board could leverage technical expertise in product design, logistics and marketing that many social enterprises sorely lack. 

Conclusion:

While interest in social enterprise has been growing for the last decade or more, the entrance of social enterprise into the broader discourse of social and sustainable business has been relatively recent. As such, it is possible to identify the trend, but not yet its outcomes.  I’d argue for two key criterion to consider when evaluating how a company is entering the social enterprise space: the extent to which social enterprise approaches influence and are integrated with core business and the quality of evidence for social and environmental impact.    Until we have more examples to judge whether this trend augers appropriation or enhancement, the jury will remain out.

Interested in social enterprise? Check out “Demystifying social enterprise and inclusive business” and “Three consequences of over-hyping social enterprise”