There’s one sector of business that has consistently outperformed the various indices during the economic downturn, yet it’s still hardly on the radar for corporate investors. Today, Social Business Enterprises (SBEs) are growing, offering both positive returns for investors and a socially-beneficial agenda.
“What we’re seeing today is a reaction to the excess of the last 30 years,” explained Rod Schwartz, one of the most vocal supporters of the SBE and Social Investment sector. “Whereas so many companies have put profit before anything else in the recent past – and have then seen that their business practices, and indeed their businesses, are unsustainable – we’re now seeing an upsurge in organisations that take a more balanced approach to business. Profitability still matters, but they value their social and environmental impact highly too.”
So who are today’s SBEs? Think Ben & Jerry’s ice cream; think the Body Shop; think Justgiving.com – all successful modern businesses intent on maximising returns, but doing so in a way that benefits the communities they work within and support.
“But there are also many models of social business enterprise that have totally blended into the business fabric and we simply don’t see as being outlandish in any way,” Rod added “Look at the success of John Lewis – a partnership owned by its employees, or the Co-operative Bank: surging while the rest of the sector’s been on its last legs. All of these businesses make money but have a strong social agenda that’s putting something positive back rather than exploiting those they come into contact with.”
Schwartz came into the SBE from investment banking. He started as a Wall Street analyst, but reached a point where the values he was trying to instil in his children didn’t square with what he was doing in his job. Now he finds that more and more business people have made the same journey. “The value of ‘values’ is on the rise in business at the expense of naked money making,” he stated. “Therefore, businesses driven by a social mission are becoming ever more attractive to today’s workforce.
“There’s a different attitude in SBEs: by and large they are becoming more entrepreneurial; people have a great deal of fun working in them, and they offer the opportunity to make a difference. All these factors make them attractive.
“Going forward, the government is looking for better ways to do business more effectively with the public sector: SBEs provide an attractive option. The growth of the sector genuinely could provide all-round benefit.”
