2020: The year for social enterprises and impact businesses to go mainstream?
By Brooke Co-founder Jeroen Bolluijt
As I am writing this, bushfires are turning vast tracts of unique Australian bush into ash, punctuating the country’s hottest and driest year on record with disaster. Scientists fear that these fires, super-charged by extreme weather conditions, have resulted in irreversible damage to ecosystems.
Last year I spent time with my parents in the Netherlands, a country known for its rain and mild summer temperatures. Not so last summer, the temperature hit 39C. Trains stopped working, roads became liquid and people didn’t know where to go for shelter because their houses did not have air-conditioning and there were no big indoor shopping centres to hide in.
The changing climate compounds the major social challenges of our time, from food and water security to the global refugee crisis. And our social media feeds remind us daily of other problems in need of attention: educational inequality, homelessness, domestic violence, over-fishing of the oceans, over-farming of the land…
I am sure I am not alone in wondering what kind of future we are heading for. Is it likely to be better, worse or just different?
Three reasons to be optimistic
There are three powerful mechanisms that are already driving significant positive impacts for the world. And I believe the stage has been set for them to come into their own over the course of 2020.
1: Millennials have grown into a consumer super-group and they have a much larger social conscience than previous generations
Teenagers are expected to represent the largest generation of consumers this year, with a direct spending power of $143 billion in the USA alone*. Not only are they becoming one of the major buying segments, they are more socially aware and therefore more likely to buy into the value propositions of social enterprises. McCrindle reports that “80% of Gen Z is said to have a greater tendency to buy products that have a positive social or environmental impact”**. There is no denying that change follows the money.
2: Technology has proven to be a major driver of change and social enterprises are starting to use this to their advantage.
Technology has proven to be a major driver of change in general. Many of the top US businesses didn’t exist 10 years ago, and the new entries can all be defined, directly or indirectly, as tech companies. This demonstrates the power of technology-based solutions and the speed at which you can scale tech-based businesses.
Top 10 US companies in 2008 versus 2018, ranked by market value (market capitalisation) in US dollars. From Milford.
Impact businesses are starting to use the power of technology to create positive impact. Farmers Edge is such an example. The Canadian startup uses satellite imagery and precision technology to help growers identify, map and manage farmland variability. This enables them to maximise profit, while minimising environmental impact. On the social enterprise front, ME to WE allows consumers to track the life-changing impacts made when they buy fair trade products or engage in volunteer tourism. They reach millions of customers and beneficiaries worldwide. And the majority of their supporters? Yep, they’re millennial.
3: Established companies are joining the ‘impact business’ movement
Initiatives like the SB Brand Transformation Roadmap demonstrate that very large businesses are starting to change their mission from pure profit to impact. To quote the Procter & Gamble Co. Chief Brand Officer Marc Pritchard: “If we could reduce, renew and recycle water, energy and waste, it would be good for people, good for the planet and save billions of dollars to invest in innovation – which is good for business”. Others majors are even more socially focused. The mission statement of the Rabobank, a Dutch retail bank, is: “Rabobank is a socially-responsible bank. We are committed to making a substantial contribution towards achieving wealth and prosperity in the Netherlands and to resolving the food issue worldwide. We focus on strengthening our customers and their communities in order to achieve these objectives.”
We need to create the new normal
At Brooke we say that a problem is solved when we have created a new norm(al). Meaning a problem isn’t truly solved until it is accepted as a normal way of being. People don’t question it and aren’t looking for alternative ways.
As a society we need to create a new normal. One in which the impact of individuals and companies on our world is at least neutral, if not positive.
2020 is the year. It’s time to go mainstream!
Sources:
*Barkley, The Power of Gen Z Influence, 2018.
**McCrindle, Generation Next: meet Gen Z and the Alphas, 2017.
