A substantial transition is underway in how leading companies think about sustainability and social impact.
More companies today see how global challenges—from climate change to modern-day slavery to pandemics like COVID-19—threaten their ability to operate, grow, and thrive. For reasons linked to risk, opportunity, and the battle for talent, we’re seeing sustainability initiatives increasingly reframed from corporate social responsibility (CSR) to core business.
Company leaders are choosing to invest in impact for their businesses, their future supply chains, and the communities they serve.
Why Companies Partner with Social Enterprises
Today’s biggest sustainability challenges, however, can’t 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.
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.
Social enterprises from mPharma to Flare to MyAgro to FairAgora to GoodWeave—are harnessing different business models and market approaches to solve key social and environmental challenges and to bring critical new products and services to emerging market consumers.
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.
Here, we highlight 6 forward-thinking companies that are leading in partnerships with social enterprises for sustainability and impact.
6 Companies Leading in Strategic Collaboration with Social Enterprises
Trillions of dollars are spent every year on global procurement and B2B transactions in global supply chains. What if a fraction of that money were redirected to businesses that are also driving social good? 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. SAP is a partner in the COVID Response Alliance for Social Entrepreneurs, and it has also launched the Sustainable Growth of Revenues for International Development (S-GRID) accelerator with MovingWorlds to build the capacity of social enterprises to partner with large corporates.
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. 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 now COVID-19.
Further, in 2021, Unilever launched its Partner Promises program, 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.
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.
4. Johnson & Johnson
In November 2019, the global healthcare company Johnson & Johnson announced the launch of Johnson & Johnson Impact Ventures (J&J 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. (And, this month, J&J Impact Ventures announced that it has expanded its commitment to $50 million to support health impact entrepreneurs innovating where markets fail and governments alone are not able to meet the need.)
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.
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. Through the Global Social Entrepreneurship Program, 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.
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. Today, Medtronic LABS has trained thousands of health workers and benefited 30,000 patients, with a focus on more effective treatment models for non-communicable diseases.
New Partners for Sustainability and Social 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.