Social enterprises go boldly where others fear to tread

Mainstream businesses and governments are not focussing enough attention on Sustainable Development Goal 10 ‘Reducing Inequalities’. This is a space where social enterprise delivers. Social enterprises – properly supported – could help reduce inequalities and build a fairer economy.

Over the past few months we’ve been researching how social enterprises across Plymouth contribute to achieving the United Nations Sustainable Development Goals (SDGs) and the United Kingdom’s Levelling Up Goals (LUGs).​ ​Whilst doing this research we noticed a specific issue on which we think social enterprises are uniquely placed to deliver. It is an issue that governments struggle with and private businesses do not regularly report on. The issue is inequalities.

These sets of goals are architectures for achieving important objectives that are shared by many. As we’ve already argued, social enterprises are realizing most of the goals in both frameworks. There are a few gaps but they are usually related to government action or international development.

​The UN SDGs - or global goals - are an urgent call for action to achieve peace and prosperity for people and the planet, now and into the future. Every member of the UN has signed up to achieving these goals, which, itself, is a major achievement and shows what can be done when many like minds work together to achieve a better and more sustainable future for all.
 
There are seventeen different goals ranging through topics such as poverty, hunger, education, environment, health, equality, economy, consumption, peace and more. The SDGs were set up in 2015 by the UN General Assembly and are intended to be achieved by the year 2030. A full list of the SDGs can be found here.
 
Reducing Inequality within and among countries – SDG10 – has a number of themes including reducing income inequalities, promoting universal social, economic and political inclusion; ensuring equal opportunities and ending discrimination. The UN recognises that the COVID-19 pandemic is likely to have reversed progress on this goal, particularly around the issue of income inequality.
 
In 2019, PriceWaterhouseCoopers (PWC) conducted research analysing how frequently specific SDGs were mentioned in business annual reports. In the same year, the UN undertook a similar exercise; looking at frequency of mention of individual SDGs in countries annual reports. PWC found that 39% of businesses specifically mentioned ‘Reducing Inequalities’ – our calculations put this in the bottom five SDGs. The UN found that SDG 10 is the goal least likely to be mentioned by governments.
 
Income and pay
 
Where’s the evidence for this? Social Enterprise UK’s (SEUK) 2021 State of the Sector report shows that social enterprises are far more likely to pay the Living Wage than standard businesses. In their national research of 890 social enterprises, SEUK found that nearly three-quarters pay this enhanced salary compared to an estimated 33% of standard businesses.
  
Economic inclusion and ending discrimination
 
The same SEUK research demonstrates how social enterprises are far more likely to promote economic inclusion. Social enterprises are significantly more likely to involve, and be led by, women: 83% of social enterprise leadership teams include women and nearly half of all social enterprises are led by women. This is significant when compared to standard businesses where 16% of all businesses and a shocking 6% of FTSE 100 companies are led by women.
 
Furthermore, social enterprises are much more likely to involve people from Black, Asian and other Minority Ethnic communities in senior positions. Nearly a third (31%) of social enterprises have directors from Black, Asian and other Minority Ethnic communities compared to just 5% in FTSE 250 businesses.
 
We also know that social enterprises are far more likely to be working in the most disadvantaged parts of the UK. Nearly half of all social enterprises are located in the 40% most deprived areas of country. Social enterprises are Levelling Up in action.
 
Core mission
 
It’s not just about pay, representation and ownership. Another interesting issue is the work of social enterprises themselves. Standard businesses are desperately trying to grapple with their purpose beyond making profit for shareholders. Others just catching up with the need for wider stakeholder responsibility to be hard wired into company law. All the while, social enterprises are already delivering on purpose – it is a defining feature of social enterprise to have a social or environmental mission or purpose enshrined in their governance documents.
 
Where to go from here
 
Supporting the start-up and development of social enterprises is a golden opportunity for the UK to help achieve reducing inequalities - not only for the sake of ticking a UN box but also to make a difference to the lives of people in our country.
 
If the UK government truly wants to level up the country and fulfil its duties towards the international UN framework it signed up to then it needs to invest in and support social enterprise much more purposefully. In the devolved regions we see some progress – Scotland has had a national social enterprise strategy for six years; Wales has a ten year plan. This is sadly lacking in England.
 
In the context of the Sustainable Development Goals, reducing inequalities, Levelling Up and the UK Shared Prosperity ambitions we clearly need more focus on social enterprise.