As COP26 gets underway, a report published today by The Enterprise Research Centre in partnership with The Women’s Organisation, explores how social enterprises are acting to reduce their environmental impact and recommends the integration of social and environmental goals in business practices to achieve sustainable development.

COP26, the 26th United Nations climate change conference, is being held in Glasgow, and brings nations together to accelerate action towards climate change and environmental sustainability. In the first few days of the conference, nations have been urged to work together for a new industrial strategy ‘powered by millions of sustainable innovations’.

And on the third day of the conference, Chancellor Rishi Sunak unveiled his vision for the UK to become the first ever net zero finance hub, which will require UK businesses to produce public plans detailing their commitment to tackling climate change.

State Of The Art Review 53: Social Enterprises and Environmental Sustainability, researched and written by Dr Emma Folmer and Dr Anna Rebmann, highlights how social enterprises are at the heart of these sustainable innovations by turning environmental problems into business opportunities and are built on a philosophy of delivering social and environmental value.

Sustainability has rapidly moved up the ladder of consumer and client interests in recent years. By adopting sustainable business practices, social enterprises are producing win-win scenarios, whereby the pursuit for profit can tackle environmental problems.

A key example of tackling environmental problems through entrepreneurial opportunities is sustainable fashion. Globally, the fashion industry accounts for 20% of industrial water pollution, 10% of CO2 emissions, and is one of the major industries associated with modern slavery (an estimated 41 million garment workers are affected worldwide). In the pursuit to make fashion more sustainable, entrepreneurs are working with recycled fabrics and waste-reducing technologies.

Some social enterprises are going further than simply appealing to sustainably conscious consumers, by embedding sustainable goals within their core business practices. These enterprises are drive by the desire to contribute directly to sustainable development, rather than the pursuit of profit.

However, the report argues to develop businesses with sustainable development at its core requires huge changes to existing business models. Set up in 2015, the United Nations Sustainable Development Goals (SDGs) are 17 interlinked global goals designed to be a ‘blueprint to achieve a better and more sustainable future for all’.

The common challenges to integrating SDGs within the business practices of social enterprises are outlined as trying to balance social and/or environmental goals with financial goals; being seen as a legitimate business in the eyes of various stakeholders; and being able to observe, demonstrate and report on sustainable development outcomes.

The report concludes this area of research to be relatively rare and recommends further research to enable social enterprises to continue tackling environmental impact.

The Enterprise Research Centre is the leading centre of excellence in the UK for research into the growth, innovation and productivity of small and medium-sized enterprises (SMEs). The ERC has become the ‘go-to’ reference point for anyone looking for robust, trusted data and insights on SME performance with project-based research covering a range of themes.

A ground-breaking partnership with The Women’s Organisation was announced in August 2020 along with a special series of five SOTA reviews. The research offers expert insights into how social enterprises can play a key role in driving economic recovery and support the communities hit hardest by the impact of COVID-19.

Further reading can be found here