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Social Enterprise and Impact Investing

Social enterprises, by definition, proactively intend to create positive societal impact as well as generate profits. In the quest for innovative ways to engage the private sector to bolster global sustainability further, social enterprises represent a new frontier for companies to create greater positive impact. The Global Compact facilitates business partnerships between social enterprises, corporations, investors and other stakeholders to advance innovative business models in emerging and frontier markets. 

Companies can benefit from viewing partnerships with a social enterprise not only as a way to strengthen the societies where they operate, but as a financially and strategically valuable investment. These partnerships have the potential to generate economic benefit for both parties involved, via:

  • Insights for innovation: Operating in low-income markets challenges companies to innovate in order to create low-cost products, new business models and efficient supply chains. Drawing on these experiences, companies can apply novel business approaches toward other similar markets. 
  • Access to new markets: Many companies recognize that low-income populations in emerging markets will constitute a significant consumer and supplier base in the long-run. Often corporate-social enterprise partnerships allow for both parties to make investments that will serve that high-potential market segment in the future. 
  • Opportunities for risk management: Corporate-social enterprise partnerships allow for both parties to diversify economically, through entering different markets, as well as operationally, through interactions with new customers, suppliers and products.

Definitions

  • Social enterprise development is defined as creating and nurturing micro-, small-and medium-sized businesses that aim for positive social or environmental outcomes while generating financial returns;
  • Impact investing is defined as the placement of capital (into social enterprises and other structures) with the intent to create benefits beyond financial return.

Social enterprise and impact investing overlap significantly, although they are not synonymous. Social enterprises, for example, need more than just investment capital to be successful, while impact investments can be made into non-enterprise structures like loan or equity funds or infrastructure projects.

Key Activities

The Global Compact offers the following opportunities to social enterprise partnerships:

The Social Enterprise Action Hub is an online meeting place to help social entrepreneurs, corporations, impact investors and policymakers to engage in partnerships that have a large market potential while delivering positive impact toward global challenges. Access the Social Enterprise Action HubAdditionally,  Gateway 2.0 enables companies on the Social Enterprise Action Hub to apply for financing from accredited investors, institutions, and government agencies through the GATE Global Impact platform. Learn more
 
Collaboration Labs connect companies, social enterprises and organizations of all sizes with a common goal: to develop partnerships and projects featuring innovative solutions to national priorities. During interactive sessions, stakeholders develop and refine solutions to the challenge at hand, with the goal of deploying the business models developed. Learn more about past Collaboration Labs: 

Partnership in Action Research Groups disseminate knowledge about corporate-social enterprise partnership best practices through webinars and guides.

Resources

A Framework for Action: Social Enterprise & Impact Investing: Guides investors, corporations and policymakers on engaging with social enterprises to create financial, social and environmental returns – outlining three key steps: prioritizing the rationale for engaging, defining a strategy, and choosing specific approaches to execute. (UN Global Compact/The Rockefeller Foundation, 2012). Download.

Webinar Recordings

Why Companies and Investors should Participate 

  • Why companies and investors should participate 
  • Engagement in the workstream represents a tangible way for your company to express commitment to the post-2015 agenda.
  • Gain insight and access to sustainability related innovations, entrepreneurial solutions, new markets and business –focused innovation networks.
  • Augment the impact of your sustainability initiatives in key emerging and frontier markets.
  • Increase awareness of your company’s sustainability initiatives across several markets.
  • Gain knowledge to help position your company as an expert and leader in social innovation vis-à-vis your most important stakeholders.
  • Connect with a pipeline of investment opportunities related to the post-2015 agenda.

Engagement Opportunities

If you would like to learn more:

  • Join the Social Enterprise Action Hub and browse thru information posted by other hub participants
  • Attend a Collaboration Lab 
  • Join an upcoming webinar
  • If you are a LEAD member: Check the LEAD Lab monthly for engagement opportunities and submit criteria for partnerships

If you would like to engage in a dialogue with the Global Compact and/or potential partners:

  • Join the Social Enterprise Action Hub and sign up for HubConnect which provides alerts when new social enterprises join
  • Contribute data for case studies on corporate-social enterprise partnerships
  • Serve on a committee to develop guides and case studies 
  • Provide input on the strategic development of the Global Compact’s social enterprise workstream

If you would like to take direct action towards corporate-social enterprise partnerships:

  • Join the Social Enterprise Action Hub and contact corporations or social enterprises on projects of interest to your organization
  • Run a Collaboration Lab

Contact

For more information, please email socialenterprise@unglobalcompact.org