A simple thing you can do to make the world a better place….
Last year a personal frustration at the constant calls and letters from charities for help made me want to find out where all the money that we give to charities goes. Some random googling led me to a project that totally blew me away. This project started 15 years ago when 189 nations came together in New York to agree on what are now known as the Millennium Development goals, a set of eight broad goals that by 2015 were designed to eliminate extreme poverty and hunger, reduce gender equality, stop the spread of HIV amongst others:
I thought wow this is great, here’s a plan that has been agreed by the world leaders and since its 2015, we must be really close to attaining them. I was so wrong….but instead of feeling despair it actually gave me hope!
These goals and the money required were a big ask, I think many didn’t believe these were even possible. But as time passed and more nations started making harder efforts towards the targets, results started pouring in. Remarkably 15 years later extreme poverty has been cut in half, more than 90% of children are getting a primary education, the number of children under 5 dying every year has been cut by 50% from nearly 13 million to 6 million. Though a lot more needs to still be done, these goals have shown how much can be achieved when focused targets are set no matter how ambitious.
As I researched more, I realised that alongside these goals, there was a call to developed nations to raise their annual aid budgets to .7% of their national income. A target that was first adopted in the UN General Assembly in 1970. Nearly half a century later only 5 countries have consistently met that target and the average ratio even now is less than half of that, around .3%! Sometimes I wonder how the world would be if the leaders would have followed through on their promises. But that’s a story for another day.
Inspired by the (unexpected!) success of the Millennium goals, in September 2015, 193 countries at the UN agreed a new set of 17 Sustainable Development Goals for the next 15 years:
Now the question in my mind was, where will the money come from?
The quest to answer this question culminated in a 7 minute TED talk that you can watch over here:
If you haven’t got time to watch the talk, look at the size of the economy, trade and FDI flows compared to aid (official development assistance) in this chart…you will get my argument that the power lies with the wealth creators who are in a great position to make the goals a reality.
But this isn’t about why businesses should get behind the SDGs, it’s about the realisation that it will be a tough exercise to get the largest businesses to get behind them with their money and resources. If you are thinking why that would be the case in the era where investors are waking up to the concept of “sustainability”, let me elaborate briefly:
- Committing money towards social purposes is a direct hit on shareholder returns with the benefit being delivered in the long term and that too isn’t guaranteed
- If a community benefits, all elements within the community share it irrespective of who initiated the benefit delivery. So there is always a nagging thought of “my competitor enjoying the benefits whilst I invest the money”
I do believe it will be possible one day that majority of the businesses will have a social motive alongside a profit one but it will be a long drawn out affair. Given the clock is ticking on 2030, I believe another way we can make business a force for good is supporting the organisations that already have a social charter built-in and are using businesses/trade to fund that social aim. Enter social enterprises…
So what are social enterprises?
Well the wiki (who else can you trust:)) definition is:
A social enterprise is an organization that applies commercial strategies to maximize improvements in human and environmental well-being — this may include maximizing social impact rather than profits for external shareholders.
There are quite a few other definitions that are used to describe them but the crux of the matter is that all of them have some sort of social mission included within their business objectives. The more they are successful in business, the more money the social cause gets. Examples of social enterprises include cafedirect, afripads, thankyou.co, clarity, Tom’s, etc. If you are thinking social enterprises is a niche concept think again! A large chunk of GDP for a lot of countries is driven by the social enterprise sector already:
I am not saying that all business should turn into social enterprises or start using large chunks of their profits for a social cause. I am trying to make the point that if we would like to live in a more sustainable and equal society, which the SDGs are trying to achieve, businesses are critical to achieving that goal. And let’s not also forget that businesses will benefit just as much if there is a more educated workforce, a healthier population that can afford to buy more stuff and save more money.
It’s not about large vs small or corporates vs people or capitalism vs socialism. It’s about change and working together to start a positive cycle where community, social good and humanity matters just as much as the pursuit of profit.
Capitalism has given us so much, it’s up to us to take the positive elements from it and pass on a much more responsible system to our future generations. A system that celebrates success, individual achievement and wealth but at the same time gives equal value to the wider responsibility that each one of us has towards our fellow beings who just so happened to be born in different circumstances.
If you believe in the power of businesses to do good, please support those organisations that have a clear social motive. Maybe the success of these enterprises can send a signal to the giants that it is not just about “how much” profit anymore but also “how it was earned” and “what its social impact was”.