First emerging in France in the 1990s, the concept of a social business is moving towards becoming a whole new economic model. The French, weakened by various crises resulting in deep social conflicts, have witnessed the growing development of new business dynamics addressing social issues.
Is this combination of social and environmental concerns with economic viability a blossoming growth lever?
A social business, what is it exactly?
Social businesses are a new form of economic activity. The concept was proposed by Muhammad Yunus, a Bangladeshi economist, entrepreneur and a pioneer of microcredit who received the 2006 Nobel Peace Prize. The ‘banker to the poor’ wanted to tackle a new challenge.
Without radically changing the system, he wanted to combat poverty by making the economy more efficient. He would do this by diverting existing mechanisms to address social and environmental needs. This new system would neither lose nor make money, with all profits being reinvested in the business and used to cover costs.
Putting it simply, a social business is a socially innovative company, an entity not relying on public or private funding, with mankind as its primary focus. Nowadays, it is common to see socially driven entrepreneurs launching original projects in the hope of using their experience and skills for the greater good.
Revelling in a rather favourable societal and economic climate, this social model can be applied to almost every industry (health, education, nutrition, energy, environmental preservation, etc.) with a view to merging profitability with social impact.
The social business, a new business model for a better future?
Social businesses address a genuine need. An ambitious and thriving entrepreneurial model, it also creates jobs. Fully aware of the enthusiasm it has generated, the French state has tried to indirectly encourage its development by passing a law that gives companies the chance to proudly bear the “Enterprise solidaire d’utilité sociale” (Ethical company with a social purpose) label.
What’s interesting, is how the social business concept also appeals to customers, and even attracts new ones. This is because most of the ethical companies create an aura of positivity. By developing new business models, they reach emerging markets in France and abroad.
Whatever their industry, the social business philosophy is a true stamp of ethical responsibility. Its production methods, environment and diversity-friendly approach (towards the handicapped, unemployed, etc.), as well as its collaborative governance involving all its stakeholders (employees, suppliers, users, etc.) gets everyone’s vote.
A concept that appeals to businesses the world over
The social business model, promising a positive social impact and new markets, has won over enterprises throughout the world. New pioneering initiatives pop up every day, hoping to work alongside public initiatives in improving the living conditions of the most destitute.
That’s why, in 2006, the global food giant Danone, in a bid to make its social and environmental concerns the heart of its business, founded Grameen Danone Foods, a social business in Bangladesh. This first company was then followed by the birth of Danone Communities, a network of social businesses that aims to fight against global malnutrition
Another example is L’Oréal. Believing that there is no sustainable growth without social action, the French cosmetics brand launched its Share & Care programme in late 2013. It aims to ensure all its employees benefit from proper health care, parental care, social protection and working conditions.
A social business cannot ignore stakeholders
The creation of a sustainable company cannot occur without a proper work ethic and dialogue with all the stakeholders. While solid partnerships are critical if the project is to come to fruition, pooling the expertise of all the stakeholders is essential in order to capitalise on experience, share resources and raise funds.
A social business knows no size limits. An ethical model appealing to large corporations, there are also many smaller players looking to conduct their business differently and make their work more rewarding. These entrepreneurs are taking it upon themselves to adopt new business models strongly orientated towards a positive social impact.
It is because of all these reasons that GreenFlex expanded its expertise by merging with Be-linked, a leading consultancy on the relations between NGOs and companies. By fusing our skills and knowledge, GreenFlex helps private and public organisations, as well as all stakeholders, to undertake their social innovation projects, whatever their sector.
Operate and invest differently in a changing society to build the realistic dream of a better world and a brighter future.