A substantial transition is underway in how leading companies are approaching pressing sustainability challenges and social impact goals.
More companies today see how global challenges—from climate change and threats to biodiversity – to gender-based violence (GBV) and modern-day slavery —threaten their ability to operate, grow, and thrive. For reasons linked to risk, opportunity, competitiveness, and external accountability, we’re seeing sustainability initiatives increasingly reframed from corporate social responsibility (CSR) to central to doing business.
In other words, company leaders are choosing to invest in impact (including the ‘S’ in ESG) for their businesses, their future supply chains, the environment, and the communities they serve.
Why Companies Partner with Social Enterprises
If we were to comb much of the deliberations over the last year from COP27 (Climate) and COP15 in Montreal (Biodiversity), as well as other world forums like Davos, one core message emerged: collective and complex sustainability challenges and wicked problems cannot be solved alone. The private sector needs partnerships, including cross-sector collaboration with diverse actors with the expertise, networks, and approaches to create solutions at scale.
In our partnered research with Catalyst 2030, we argue that companies derive particular value from partnering with social enterprises to achieve their sustainability goals.
Here, we define social enterprises as mission-led organizations, whether for-profit or non-profit, that tap market-let approaches and mechanisms for financially sustainable, scalable impact.
Learn Why Companies Partner with Social Enterprises
Our research explored how and why large companies partner with social enterprises to expand opportunities in emerging markets and solve complex challenges. We found that companies are engaging social enterprises in their value chains and beyond.
Through these partnerships, companies are addressing supply chain risk, advancing competitive new products and services, developing markets at the first and last miles, gaining exposure to new business models and disruptive innovation, and investing in scalable and sustainable solutions in line with their impact goals.
7 Companies Leading in Strategic Collaboration with Social Enterprises
Here, we highlight 6 forward-thinking companies that are leading in partnerships with social enterprises for sustainability and impact.
1. SAP
For over a decade, the global software giant SAP has strategically worked with the social enterprise sector.
In 2020, SAP launched 5 & 5 by ’25, an initiative to direct 5% of its addressable procurement spend to social enterprises and 5% to diverse businesses by 2025. Based on early pilots in select markets, SAP estimates this effort could funnel up to USD $60 million per year, globally, to social enterprises and diverse suppliers by 2025. Critically, this initiative takes money that the company would have spent anyway through procurement and channels it toward organizations that are driving economic equity, positive social change, and environmental sustainability. The result unlocks significant funds for impact—beyond what might be possible through CSR alone.
SAP is also partnering to advance the enabling ecosystem for social procurement —to allow more companies to successfully engage social enterprises as suppliers and service providers within their supply chains.
For its efforts, SAP received the Catalyst 2030 award in June 2022, which recognizes the company’s commitment to collaborating with social entrepreneurs and delivering work that focuses on inclusiveness, equity, and sustainability. Specifically, the award celebrated SAP’s pro-bono consulting programs, which connect employees with social enterprises from all around the world and open up new opportunities for social impact and leadership development on a large scale.
According to SAP in announcing the honor, the initiative “enables social enterprises to leverage SAP’s expertise and adjust their businesses to the current challenging environment, while also refining and adapting their innovative business models in areas such as climate action, circular economy, and equality.”
2. Unilever
Unilever, through its TRANSFORM initiative—a joint venture with the UK’s Foreign, Commonwealth & Development Office and EY—offers funding and bespoke business support to social enterprises that deliver market-based solutions to pressing development challenges.
Since its inception, TRANSFORM has supported 56 projects and enterprises across 13 countries, including, for example, Kasha, a mobile e-commerce and content platform that confidentially sells and delivers women’s health and personal care products to women in Rwanda and Kenya. TRANSFORM focus areas have included Water, Sanitation, and Hygiene; Health and Well-being; Energy and Environment; Rural Livelihoods; and the global pandemic.
With an announcement in 2022 that the TRANSFORM initiative would be extended through 2025, Unilever joined forces with the Global Solidarity Fund (GSF) to replicate the TRANSFORM approach in Latin America, starting in Columbia. According to the company, the intent is to “leverage TRANSFORM’s capabilities and expertise in marketing, distribution, digital and business resilience to deliver transformative market-based solutions that last.” The initiative will focus on facilitating social entrepreneurship and impacting labor markets for inclusion of migrants and refugees.
Given the expanded timetable and scope, Unliever launched the TRANSFORM Support Hub in partnership with software firm SAP and platform operator MovingWorlds. The Hub was designed as an effective way for professionals, corporates and social enterprises to connect and collaborate. Specifically, the new hub is a one-stop-shop through which social enterprises can access learning modules and pro-bono support from skilled professionals, make corporate connections and network with peers and investors.
The Hub is a flagship initiative of the Global Alliance for Social Entrepreneurship (GASE) and is hosted by the World Economic Forum.
Unilever continues to expand its Partner Promises program, launched in 2021, to engage its suppliers in addressing social inequity; remedying living wage gaps; and measuring, reducing, and reporting on climate emissions in their shared value chains. In a related push, Unilever also announced that it will spend €2 billion annually with diverse suppliers worldwide by 2025.
3. IKEA
In 2012, IKEA launched IKEA Social Entrepreneurship to bring suppliers with a social mission into the core of their enterprise. Today, IKEA looks for social enterprise partners who create and scale livelihood opportunities for communities that otherwise struggle to access the global labor market.
IKEA offers training and mentorship to ensure that its social enterprise partners can meet the company’s supply chain and product quality standards. It also provides social enterprise partners with targeted support with product design, business management, social impact analysis, communications, financial instruments, and networking. Today, partnerships with social enterprises have helped IKEA create over 30,000 jobs across six countries.
IKEA has also established accelerators with partners like Ashoka, Acumen, and NESsT to scale entrepreneurial solutions and build the capacity of social enterprises. For example, IKEA and Acumen have co-created an accelerator that provides online learning and coaching to develop the business capacity of 34 social entrepreneurs in East Africa.
As part of its 2022 Sustainability Report, IKEA Social Entrepreneurship reported it had supported a total of 101 social enterprises across 26 countries and partnered with 11 social businesses in IKEA production across home furnishing and food products, creating 10 social business products and the company’s first global social business collection, VÅRDANDE, a collaboration with five social businesses across Asia, committed to bringing long-term employment and education opportunities to marginalized groups.
Learn What Happens When Large Companies Join Forces with Innovative Social Enterprises
4. Johnson & Johnson
In November 2019, the global healthcare company Johnson & Johnson announced the launch of Johnson & Johnson Impact Ventures, an impact investment vehicle housed within the Johnson & Johnson Foundation.
J&J Impact Ventures invests in “purpose-driven entrepreneurs whose innovations address health workforce and health care challenges in low-income and diverse communities.” J&J Impact Ventures also works to build the entrepreneurial ecosystem through results-based incentives and support for health-focused impact business accelerators.
J&J Impact Ventures currently supports 47 health impact entrepreneurs, with a particular focus on the most vulnerable, underserved, and at-risk communities, covering a range of issues, from access to emergency response systems to loan repayment for health workers to job placement for people in recovery from depression. Since J&J Impact Ventures' investment, its portfolio has reached over 13,000 health workers and 1.7 million people with innovative health solutions.
Johnson & Johnson also engages social enterprises through its Center for Health Worker Innovation, which supports and champions nurses, midwives, and community health workers at the heart of delivering care. Through the Center, Johnson & Johnson is creating platforms for partnership, learning, and action for a set of six Global Interventions, ranging from nurse education financing to resilience building programming to digital health technology applications. The company collaborates with a range of cross-sector partners across its Global Interventions, including social enterprises such as DANAdidik, Praekelt.org, TNH Health, reach52, and CareMessage.
Finally, Johnson & Johnson has committed $100 million over five years to invest in and promote health equity solutions and innovators across a broad range of partnerships and focus areas, to combat racial and social injustice as a public health threat.
5. Microsoft
Through its Global Social Entrepreneurship Program with MIT Solve, Microsoft is engaging with over 100 global social impact organizations, working across the UN Sustainable Development Goals. The program connects startups with access to technology, training, new markets and customers, and grant funding.
Microsoft is specifically seeking social innovators who have identified new ways to apply artificial intelligence for social change. Selected innovators such as Vector Center and UPEPO, for example, are demonstrating how Microsoft’s cloud computing platform, Azure, can be applied to the water crisis and global climate change.
In February 2023, Microsoft announced a collaboration with Maria 01, the leading startup campus in Northern Europe, based in Helsinki, Finland. The partnership is designed to boost the Entrepreneurship for Positive Impact program, which aims to support and accelerate the world’s most pressing problems in areas such as healthcare, education, and sustainability. The program is built along the UN SDGs of Quality Education (SDG 4)l Decent Work and Economic Growth (SDG 8); Climate Action (SDG 13); and Peace, Justice, and Strong Institutions (SDG 16).
The Entrepreneurship for Positive Impact program is part of Microsoft for Startups Founders Hub, which offers a range of support and resources to participating companies including free access to technology, mentoring and coaching, and an array of accessible tools and support including:
- Microsoft Azure credits (up to worth $150’000 for four years)
- Access to free Microsoft Visual Studio and GitHub Enterprise
- Microsoft 365 licenses, including Microsoft Teams to run your business.
- Free Microsoft Dynamics365 and Power Platform licenses
- 24×7 technical support
- Access to a rich mentor community
6. Medtronic
To advance its impact and innovation objectives, the medical technology company Medtronic took the ambitious step to incubate and launch an independent social business.
Medtronic launched the social business Medtronic LABS to expand access to healthcare in emerging markets, by designing, building, and scaling technology-enabled healthcare delivery models that address barriers to care in low- to middle-income countries. Medtronic LABS began as an initiative within Medtronic before it launched as an independent public-benefit corporation in 2020.
In 2022, Medtronic LABS reported it had entities and programs in Kenya, Tanzania, Rwanda, Ghana, Sierra Leone, and India and had reached over 1M patients, improved outcomes for over 50,000 patients, and trained over 30,000 health workers. Medtronic LABS started with hypertension and diabetes in 2013 and recently expanded its work to address any condition requiring longitudinal management, including TB, HIV, mental health, and pregnancy, with a focus on more effective treatment models for non-communicable diseases.
7. Timberland
As described by Resonance co-founder and Chief Innovation Officer Steve Schmida with co-author Dan Viederman, Partner with Working Capital Innovation Fund, Timberland represents a growing trend among large companies to establish partnerships with social enterprises as a primary supplier. The company began working in 2020 with the Minnesota-based social enterprise, Other Half Processing, to build leather supply chains from ranches that use regenerative grazing practices. Owned by two social entrepreneurs (and brothers), Other Half sources hide from 6 locations from animals raised in regenerative systems to ship to Timberland to make leather boots.
At the same time, Timberland announced a new partnership with the Savory Institute, a nonprofit focused on the large-scale regeneration of the world’s grasslands. This partnership is two-pronged. One prong includes Timberland’s efforts to co-fund the Savory Institute’s ecological outcome verification (EOV) programs on all ranches within the Thousand Hills Lifetime Grazed network, made up of early adopter regenerative ranches across the United States. The investment is part of a larger sustainability strategy at Timberland that is focused on three pillars — better products, stronger communities, and a greener world.
The second prong of the partnership, according to an article in Greenbiz, “is the opportunity for Timberland to test and learn and build a new supply chain from the ground up.” Timberland is working on introducing a collection of boots using regenerative leather sourced from Thousand Hills Lifetime Grazed ranches to serve as a proof of concept to demonstrate what can be done in the company’s efforts to make all products 100 percent circular, and ensuring all materials are sourced from regenerative agriculture as part of a bold new environmental target of becoming carbon negative by 2030.
New Partners for Sustainable Impact
Leading companies—like the ones we’ve highlighted here—are exploring new ways to tap collaboration to solve big problems and advance hard-to-reach impact objectives. This includes engaging outside-the-box partners, such as social enterprises.
There are many reasons to partner: Social enterprises are inherently innovators and risk-takers, and— when done right—their models are built for sustainability and scale. They bring a unique understanding of emerging markets and traditionally underserved customers, and they can forge meaningful access to the otherwise hidden stakeholders—factory workers, farmers, miners, communities—who increasingly power global supply chains.
By investing in, supporting, and working with social enterprises, companies access new mechanisms, models, and innovations for meeting their corporate sustainability goals, mitigating supply chain risks, and benefiting the communities they serve.
Some of the above content was excerpted and/or adapted from the recently released report Catalysing Collaboration: How & Why Corporates & Social Enterprises Should Partner to Achieve the Sustainable Development Goals.
Editor’s Note: This post has been updated for accuracy and current best practices.
