The British Council and Social Enterprise UK with support from the World Bank have launched a report called Think Global, Trade Social: How business with a social purpose can deliver more equitable and sustainable development for the 21st century.
The report (downloadable below) makes a clear case for the important role that social enterprises can play in driving sustainable and inclusive development, tackling inequality, and helping to address some of the biggest social and environmental challenges targeted by the UN’s Sustainable Development Goals (SDGs).
In the publication’s foreword, Professor Muhammad Yunus, the Nobel laureate and Grameen Bank founder, and Linda McAvan MEP, the Chair of the European Parliament’s Committee for International Development, write: ‘Aid alone cannot be our response. Global sustainability and the nature of the economy will be shaped by entrepreneurship and the terms on which we create and do business with each other.’
Why inequality matters
Published to coincide with the adoption of the SDGs by all 193 UN member states, a pivotal event that set the world’s development agenda until 2030, the paper lists our considerable achievements and substantial failures in meeting the previous set of global targets, the Millennium Development Goals (MDGs).
According to the UN, ‘we have seen the fastest reduction in poverty in human history’ during the MDGs, with half a billion fewer people living in poverty today than in 2000. However, over 1 billion people still live in poverty, universal primary education has not been achieved, and women still experience massive disadvantage in many parts of the world. Moreover, we face enormous challenges in areas such as reducing child mortality, reversing the spread of HIV/AIDS and tackling the impacts climate change, to name a few.
Think Global, Act Social argues that our biggest challenges are interconnected and linked to the core issue of income inequality, which impedes poverty reduction and contributes to a host of social, political and economic problems. If we are to deliver against ambitions for more equal access to healthcare, education, food and other essentials, then we must surely consider how economic inequality is holding us back.
To meet our targets we must innovate
Our response must include more inclusive and democratic models of economic development that promote sustainable patterns of consumption and production. It requires policies that tackle poverty in both developed and developing countries and manage our resources more responsibly. It calls for development cooperation, trade, and social investment to generate both economic opportunity and social impact, so that the benefits of growth are more equitably shared.
Global trade, investment and business activity are our most powerful drivers of economic transformation and social change. The report notes that Overseas Development Assistance remains critical, but at $134.8 billion in 2013, the amount we spend globally on aid is dwarfed by the worldwide trade in goods and services, which was worth $23 trillion in 2014. In other words, trade, enterprise and business are by far the most critical drivers of local opportunity and global prosperity.
That said, we cannot rely on business as usual to stem the tide of income inequality and address our biggest social and environmental challenges. We need to harness these economic models and practical means of delivery to drive more sustainable and equitable development. This means mainstreaming social enterprise approaches in our economic and aid delivery models.
Good business is good business
Social enterprises trade for a social or environmental purpose, reinvest profits into their mission, and are accountable for their actions. In countries such as Canada, Germany, the UK and the US, social sector organisations already account for more than 5% of GDP.
By demonstrating that good business can be good business, these enterprises are influencing wider markets and the terms of trade for companies more widely. They offer a business model and mechanism to help achieve our shared objectives for more equitable and sustainable development. They are a powerful means to deliver on our ambitions.
As currently drafted, the SDGs significantly understate the role of business, of responsible trading, social entrepreneurship and social enterprise, but they have a critical part to play in realising our ambitions. This report offers a number of recommendations to the UN and G20, to donor institutions and to governments around the world on harnessing the potential for business with a social purpose to deliver our common social and environmental goals.
As Professor Yunus writes, ‘Putting social and environmental purposes in the driving seat of business is the only way to ensure an equitable and sustainable economy for the 21st century.’