Image: ReNew Property Maintenance
Social enterprises are an innovative breed of business that, like some other impact business types, work to create a fairer and more sustainable world.
However, while social enterprises may share an ideal of a fairer and more sustainable world with other business types, they are unique. They are not charities delivering impact through government and philanthropic funding, and they are not private businesses that operate in an ethical way. What makes social enterprises unique is that they do three key things:
- They have a defined primary social, cultural or environmental purpose at the heart of their business (like a charity)
- They generate a substantial proportion of income through trade (like a private business that operates for profit)
- They invest (primarily self-funded) efforts and resources into purpose so that public benefit outweighs private benefit
Social enterprises come in many shapes and sizes and operate in all industry sectors of the economy. Some better-known examples include Who Gives a Crap, donating profits from the sale of toilet paper to build toilets and improve sanitation around the world, and Streat, who provide training and support for at-risk youth through their catering business. Other examples include a graphic design company creating jobs for ex-offenders, a gym providing affordable wellbeing services to the community, or a factory that recycles office waste and employs people with a disability.
There is no single legal form for social enterprises in Australia, and in fact, they can take any legal form.
The breadth and diversity of businesses operating with purpose at heart is inspiring, but without independent certification against the three criteria above, the diversity of the sector also makes it easier for non-genuine operators to pose as social enterprises and engage in social washing.
Images (left to right): CommUnity Construction; top row: All Things Equal, St John Ambulance; bottom row: Heidelberg District Community Enterprise, CandleXChange; The Social Outfit
Certification for the social enterprise sector
Certification is critical to clearly define and elevate the social enterprise sector, to identify those businesses genuinely delivering impact through independent trade, and to build business, consumer, and stakeholder confidence in the unique and innovative social enterprise brand.
In the words of Social Traders CEO, Tara Anderson:
“If we expect people who have never heard of us to understand us, we have to clearly tell them who we are. If we expect businesses to buy from us, they need a list that has been de-risked because they’ve been checked to be genuine. If we want government to create policy around the sector, they need to know which organisations are included within that.
If we want consumers to buy from us with confidence, they need to know what exactly makes a social enterprise purchase different to the plethora of other ethical purchase choices. And if we want to teach it to others, we need to say what exactly ‘it’ is”.
This is why certification is valuable at a sector level, but certification is also important to individual social enterprises.
Certification for individual social enterprises
The certification framework has been designed based on both international and domestic research – we looked at international social enterprise certification frameworks, and based on Australian research, tailored our approach to be appropriate for the local sector. We work with social enterprises through the certification process to articulate their social impact model, and the activities and costs associated with it.
For individual social enterprises, certification:
- Provides external validation of your business, helping you to showcase your commitment to positive social and environmental outcomes
- Helps you articulate and quantify your purpose, the impact of your work and your investment into impact
- Provides access to a growing community of certified social enterprises
- Ensures your impact and investment into purpose is reflected in the data and stories that Social Traders uses to advocate for the sector
- Unlocks opportunities with ethical shoppers – both consumer and business, seeking to confidently spend money with businesses making a difference for people and planet
Carmen Garcia AM, Founder and CEO of certified social enterprise Community Corporate says:
"The Certification process led by Social Traders plays a pivotal role in setting standards across social enterprises. Community Corporate is proudly certified and we believe this gives our clients and partners greater confidence in the way we do business. The ability to qualify our contribution to social change and sustainability is assessed through this certification process."