A Caribbean model of social enterprise
Warning: the opinions presented are those of the author and do not necessarily represent those of the organizations with which he is associated. Comments and feedback that move the regional dialogue forward are welcome at [email protected]
All businesses, whether they realize it or not, have, for better or worse, an impact on the well-being of people and the planet. Today, the trend of deliberately having positive impacts on people and the planet is gaining momentum, with some prominent examples in the Caribbean.
To realize what the impact of your business is, your organization must become aware of the different resources it uses as inputs, the results it generates through its products or services, and the changes associated with the well-being of people and of the natural environment.
These changes of well-being and nature, positive and negative, constitute the ultimate value that the organization generates, its realized objective.
Many organizations naively, albeit sincerely, believe that the purpose of a business is simply to make money. Most people, and most boards, are so busy ensuring financial viability and returns, or executing and meeting customer demands, that their impact, the ultimate value, exceeds their ability to manage. ‘Warning. Many aren’t even aware of the overall impact they are having and struggle to conceive of a true bottom line, let alone measure it.
What is a Social Enterprise?
All over the world, including the Caribbean, there is a large group of companies, organizations and different legal entities that consider themselves social enterprises. They explicitly and systematically seek to produce a positive impact on people, communities and society using entrepreneurial means and to reinvest any excess in creating other positive impacts. These include cooperatives, mutuals, social enterprises, affordable housing initiatives, associations and foundations. Together they form the basis of the social economy.
The European Commission estimates that 10% of all businesses in the EU, or around 2.8 million, are social economy enterprises. They employ 13.6 million people, around 6.2% of the EU workforce.
Social enterprises can operate in various legal forms. Some are cooperatives, some are registered as private companies limited by guarantee, some are registered as “for profit”, some are “not for profit”, and some are registered as , foundations or voluntary or friendly charities.
According to Lex Mundi, in the UK the most common form of organization used by social enterprises are unincorporated associations, community benefit companies, companies limited by guarantee and industrial provident companies. to community benefits.
Social enterprise in Jamaica
In a 2019 study on the state of social enterprise in Jamaica, 114 organizations were identified that fit the definition of social enterprise used in the study:
• No more than 70% of funding used by the company comes from grants and donations
• The organization emphasizes collective benefit/social/environmental/cultural mission and benefits
• The organization reinvests any surplus in the company and the social mission.
The majority of social enterprises in this study have started since 2011, indicating that the sector is relatively young.
Experience across the world shows that there is hardly any form of organization that prevents an organization from being driven by its purpose, the ultimate value it creates for identified stakeholder groups. This is central to good governance for all types of organizations according to the recent publication “ISO 37000 Governance of organizations – Guidelines”.
In many countries, the small and medium enterprise (SME) sector has been nurtured by changing legislative landscapes, government policies and supporting initiatives. This has created forms of organization that are particularly conducive to the complementarity of public efforts in favor of social development and the protection of nature.
Recent and planned developments in Jamaica illustrate this well. In 2017, the Jamaican government amended its Micro, Small and Medium Enterprises and Entrepreneurship Policy to include a definition of social enterprise. Since then, a social enterprise task force, led by the Planning Institute of Jamaica and the Ministry of Industry, Investment and Trade, has conducted research, consultations and worked with partners local and international to develop a bill on social enterprises.
Two features highlighted in a recent article on the new social enterprise law published by Pioneerpost are particularly promising and interesting.
First, Jamaica will soon be considering legislation that will create a new “legal status” that any organization, regardless of its legal form, can apply to be granted – once it meets specified conditions – for social enterprise. This is not only extremely convenient because organizations would not have to change legal form, it is also in line with the emerging general consensus that all organizations, regardless of form, should fulfill their purpose, behave ethically, manage resources responsibly and to perform effectively.
The second feature is the fact that the Jamaica Stock Exchange established a Social Stock Exchange in 2019. Organizations that meet the social enterprise requirements will be able to attract different types of funding from investors who might expect social and financial returns. on their money.
At a time when the world is experiencing an increasing number of crises and organizations are constantly struggling to bridge the gap between action, commitments and science-based Sustainable Development Goals, such innovation should be celebrated, replicated and scaled. At scale. Let this be our new Caribbean movement.
Dr. Axel Kravatzky is Managing Partner of Syntegra-ESG Inc., Chair of TTBS/TC309 Mirror Committee, Vice Chair of ISO/TC309 Governance of Organizations, and Co-Organizer and Editor of ISO 37000 Governance of Organizations – Orientation. He is currently project manager for ISO 37006 Indicators of Effective Governance.