Jackie Vorster | General Manager | Colours of a Kind | mail me |
As global businesses navigate an inflationary macro- environment accompanied by extended market volatility, Nasdaq is calling 2023 a new market era of positive impact.
The booming global impact investing market is estimated at $1.164 trillion by the Global Impact Investing Network (GIIN). Its CEO and co-founder Amit Bouris says while climate has dominated investor energy for environmental and social issues around the world until now, the ‘S for Social’ in ESG, which refers to a company’s impact on society, how it treats its staff, suppliers, customers as well as the communities in which it operates, is starting to garner more attention from investors.
Bouris believes this trend will accelerate over the course of 2023, as factors such as the pandemic, economic turmoil, war, high-interest rates, and market recessions adversely affect vulnerable populations.
I agree with this prediction, companies that prioritise social responsibility are more likely to attract socially conscious investors and clients, and be better positioned to manage risk and build long-term value.
In order for companies to thrive in future, it is becoming increasingly important for them to innovate and evolve their business models to ones that are impact driven, instead of simply adding sustainability as a separate concern. This means operating with a double bottom line that is focused on both profit and impact. This key change in a company’s money flow structure will put social enterprises at the heart of impact investing and position them as an engine for future market growth.
What is a social enterprise?
A social enterprise that is able to fund and manage itself efficiently is just like any other business, except that in addition to “doing well” financially, it also “does good,” i.e. it promotes sustainable development and social welfare by creating jobs for the marginalised, providing services for underserved communities or safeguarding the environment.
In buying goods and services from social enterprises, companies can incorporate social enterprises into their supply chains and generate social or environmental impact through their procurement. This then drives impact directly and goes beyond awareness building, while also reducing supply chain risks.
A recent survey conducted by Yunus Social Business supports this growing trend of social procurement, by showing that 55% of respondents engage in social procurement in order to develop new business distribution or innovation models in collaboration with social enterprises, while 60% do so to answer customer demand for socially sourced products and services, while also creating brand differentiation.
Partnering in social businesses
With social enterprises, companies have the opportunity to operate in a sustainable community development model as a partner in social business.
Our objective is to uplift and empower young women in disadvantaged communities in and around the Mother City. This is done by educating them and helping them to find a job and build a career within the textile and fashion industry.
The launch of our Creative Studio at the beginning of 2023 at WEX in Woodstock has incorporated a bespoke “Cut, Make and Trim (CMT)” service with purpose to their overall proposition, where customised products and corporate gifts are produced and sold by their graduates to business customers, in the aim of helping them gain financial independence.
Our business-as-usual empowers and uplifts women from underserved communities and builds income streams. For example, shopping bags previously ordered from a normal factory can be ordered from us, and that order will do so much good.
In addition to being a partner in social business, companies can donate towards good community work, specifying the avenue they would like to see their funds used, or provide gifts in kind, such as equipment and supplies, or even training hours from industry specialists. For both options, a tax-deductible receipt will be issued.
In conclusion
One of the direct impacts of investing in social businesses is that it increases the amount of private capital used for social causes, helping to cover the public shortfall.
Indirectly, it backs market development and motivates other investors to get involved, creating a more enabling environment and greater access to much-needed capital in these tough economic times.
