By partnering with social enterprises, businesses can accelerate growth and ensure their operations include a positive humanitarian and environmental impact
Growing a business has never been more difficult. With the world experiencing multiple crises – a global pandemic, social injustice, overconsumption of resources and climate change – corporations need to rethink value creation. Across regions and industries, businesses should be asking what can be built on top of their core operations and mission to ensure a more prosperous, equitable and sustainable world.
Successful organizations will strike a thoughtful balance. More than ever, people seek personal fulfillment from their work and take pride in being part of a diverse and inclusive workforce. Sustainability, being forward-facing and solution-focused attracts talent and deeper commitment. Simultaneously, businesses want to be more agile, resilient and innovative to deliver long-term value.
Investors increasingly assess companies by their impact on society and the environment
At SAP, we do not view these as distinct outcomes. Our approach is to evolve holistically and align our goals. Our defining principle puts shared values and purpose at the core of business while harnessing digital technologies. This powerful combination inspires, engages and attracts people while it unlocks innovation, agility and resilience.
Inspired people and hyper tech prowess provide the infrastructure for other avenues of positive change and expansion, such as partnering with social enterprises.
Social enterprises are ordinary, for-profit businesses that have a humanitarian or environmental mission at their core. When they make money, they direct a significant portion of their profits back into that mission. Social enterprises represent a hugely under-tapped resource for corporations to meet the changing expectations of today’s consumers, employees and investors. Partnering with, or purchasing from, a social enterprise can transform something basic like obtaining goods and services into part of the sustainable growth strategy while deepening employee pride and customer loyalty.
Putting social impact first
Consumers expect companies to stand for both profit and social impact. This is evidenced by the dramatic shift in buying patterns. According to the NYU Stern Center for Sustainable Business, 50 percent of growth in sales of consumer-packaged goods between 2013 and 2018 came from sustainability-marketed products.
Additionally, more and more employees expect their companies to promote solutions to global challenges. Today’s high-performing candidates seek businesses that support socially impactful endeavors and will help them apply their skills not only to the top and bottom lines, but to the “green line” of sustainable growth.
Investors increasingly assess companies by their impact on society and the environment and the financial implication is real. Environmental and social issues drive 25% of the money invested in the US. Globally, $23trn is now allocated to funds committed to responsible investing.
Social enterprises have been working for decades to drive more sustainable and inclusive business models. Often lean and with mission-driven operations, these organizations are struggling in the global pandemic. Corporations have a significant opportunity in this climate: Support these vital and growing enterprises and protect years of innovation and value creation.
The social enterprise sector is estimated to be worth $12trn globally and could increase employment by up to 380 million jobs by 2030. Through meaningful support and partnership with social enterprises, social change and more deeply embedded humanitarian missions can be woven into core businesses.
SAP One Billion Lives Platform
A tenet of SAP One Billion Lives is to find a better way for corporates to grow. SAP One Billion Lives’ ambition to positively impact one billion lives is realized in part by accelerating social entrepreneurs.
Internally, SAP One Billion Lives supports employees who conceive and develop a portfolio of sustainable, shared-value impact ventures. These ventures aim to help solve the world’s biggest problems by utilizing the best SAP has to offer — its people, technology, ecosystems and resources.
Social enterprises are ordinary, for-profit businesses that have a humanitarian or environmental mission at their core
Our employees, driven by their hearts and expertise and underpinned by SAP resources, created businesses that helped establish more effective cancer treatment protocols in India, improved disaster relief efforts around the world, made sustainable supply chain sourcing possible and set out to eliminate child labour in cobalt mines. In the face of a global pandemic this year, SAP One Billion Lives also drew focus on addressing COVID-19 challenges, from enabling humanitarian response during the pandemic, to better management of cohorts with different Covid-19 statuses in the workplace.
Harnessing social procurement
SAP One Billion Lives believes in integrating social enterprises into the global economy through procurement practices and by supporting social entrepreneurs. The platform’s mission externally now includes trumpeting the value – actual and inherent – of supporting social enterprises.
Social procurement is one of the easiest ways a corporation can drastically boost their contribution to a more sustainable, equitable world. The basics of a business can seem universal whether it is marketing services, coffee, or paper. Social enterprises exist which can meet these needs and many more. Value increases while the spend stays the same. SAP has spent 2.5% of its addressable spend in the UK with social enterprises and we plan not only to significantly increase this amount, but to take the program worldwide.
Our SAP Ariba Network, the largest B2B commerce network in the world, which processes over $3 trillion in transactions per annum established a partnership with Social Enterprise UK. SAP now includes their members running mission-driven businesses on the Ariba network, connecting myriad social enterprises with corporations across the world who want to make a difference with their spend.
Social enterprises have been working for decades to drive more sustainable and inclusive business models
SAP believes we have a vital role to play. We can drive more purpose-enabled value creation for our customers and communities by helping them run sustainably, innovate for impact and partner for a more equitable world.
SAP stands behind the three themes laid out in the first article in this series. The challenges we face today aren’t independent, but rather interdependent. We deeply believe that the best-run companies of the future will seek profit, resilience and sustainability in equal parts. The formula is clear: Act with purpose and lead in growth.
To learn more about how SAP is leading with purpose, visit sap.com/purpose. And to explore how SAP is helping corporate business grow through purpose-driven innovation with social enterprises, visit sap.com/socent.