How companies can partner with social enterprises in their value chains

A growing number of leading companies are answering this question, in part, through partnerships with social enterprises. Social enterprises are mission-led organizations — for-profit or nonprofit — that tap market forces to explicitly create social or environmental impact. Catalyst 2030 (a global network of social entrepreneurs) and Resonance (a mission-led global consulting firm) recently completed new research exploring how companies are strategically engaging social enterprises in their value chains and beyond.

What we found is that social enterprises have much to offer: They’re testing and scaling innovative new business models that can help companies solve key sustainability challenges; reach underserved customer populations; and advance more ethical, more resilient supply chains. When a company engages a social enterprise — as a supplier, a distributor or a B2B service provider — directly within its existing value chain, it takes the money it would have spent anyway and directs it toward a partner that will also create social or environmental value.

SAP found that by directing just 5% of its addressable procurement spend to social enterprises, it could unlock tens of millions of dollars each year for social impact.

1. Social enterprises as suppliers

Social enterprises can facilitate responsible sourcing by advancing sustainable production practices and ensuring fair labor. They can do this by acting directly as suppliers. For example, Vega Coffee helps its organic coffee farmers — 95 percent of whom are women — in Colombia and Nicaragua streamline the supply chain and increase their incomes by also processing, roasting, and packaging their beans; Javara is working to sustain Indonesia’s food biodiversity heritage by helping local farmers, foragers and food artisans access national and international markets.

2. Social enterprises as last-mile distributors

Many global companies struggle with how to best connect with "last-mile" customers in emerging markets. This is a challenge that social enterprises are well-positioned to help solve. Through their deep know-how, innovative new business models, and existing local networks, social enterprises can help companies better understand and access hard-to-reach markets.

3. Social enterprises as B2B service providers

Social enterprises can help companies advance sustainability and social responsibility initiatives not just at points of supply and distribution, but all along their value chains and operations. These partnerships present a wide range of possibilities.

Today’s business climate is making it both more necessary and more possible to partner with social enterprises. Integrating such collaboration into corporate value chains, although not always easy, presents an opportunity for big returns — for people, the planet, and companies. For More details Click Here