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Social Enterprise is not the same as Sustainability

In a recent webinar presented by the Great Lakes Chapter of International Society of Sustainable Professionals (ISSP) the point was argued that eco-efficiency is not the same thing as sustainability.  Likewise, sustainability is not the same thing as social enterprise.  Since this is the Social Enterprise and Sustainability Blog I thought it would be nice to point out that they are not synonyms, especially since social enterprise, a newcomer to the business school lexicon, may actually be supplanting sustainability as a term and orientation of preference, and not just at Loyola (that is my prediction).  We should be clear about what is actually happening, however.

While sustainability is not the same thing as social enterprise, that is, they are not synonyms.  The two may – sometimes – intersect, but an intersection does not an identity make.

What is sustainability?  A lot of ink has been spilled trying to define sustainability.  Its meaning is highly disputed.  Some say it has been overused and, because of that, has become a meaningless term.  However much diluted in meaning, sustainability has origins in ecological and environmental concern and such is always implied when the term is used in the sense of sustainable marketing, sustainable business, sustainable products, sustainable consumption, or any other manner in which sustainable is used as a modifier.

The concept itself has roots in the 18th and 19th century German concept of sustained-yield, a forest management practice.  Its more modern use derives from the Club of Rome and its 1972 report entitled The Limits to Growth.  Over the years sustainability has come to have many different and sometime conflicting meanings, an achievement of the so-called Brundtland Report (Our Common Future, published in 1987).  That report was not the first to combine sustainable and development to form sustainable development but is responsible for popularizing the term.  The report has given us the most often quoted, paraphrased and summarized definition of sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”  As a definition this is sufficiently ambiguous to open a Pandora’s box and permit almost anybody to define it anyway they want.

With all this said, the term, whether explicitly stated or not, implies something to do with ecological and environmental issues – simply because of its historical origins.

What is social enterprise?  Social enterprise has no such implied meaning.  It, too, has different meanings – depending on where you are.  In the United States it has philanthropic roots; elsewhere it has cooperative roots (cooperative as in how a for-profit organization is organized).  Consequently, in the United States social enterprise has to do with the mission of the organization.  In the U.K., and elsewhere, it may have more to do with the ownership model of the enterprise, although they, too, use the term to refer to mission.  That would be a natural connection because cooperative forms of organization (think Mondragon Corporation, the federation of worker cooperatives based in the Basque region of Spain) are generally so organized because they are pursuing a mission other than the profit-at-the-expense-of-all-other-possible-missions of capitalist enterprise.

Since Loyola is in the United States, virtually all references to social enterprise is to the former meaning, with the emphasis on mission, not enterprise ownership or organization.  The Social Enterprise Alliance (https://www.se-alliance.org/what-is-social-enterprise) defines a social enterprise as a business “whose primary purpose is the common good.”  That is ambiguous enough to permit Deborah Mills-Scofield of Harvard University to suggest, in her blog, that all businesses are (or should be) social businesses.  You can read her blog here:  (http://blogs.hbr.org/cs/2013/01/every_business_is_or_should_be.html).   They should be but are not necessarily so.  Similarly, Alex Mitchell, at the Institute of Directors (UK), has similarly said that all businesses will have to become social enterprises.  You can read about is comments here: http://socialenterprise.guardian.co.uk/social-enterprise-network/2012/nov/27/businesses-social-enterprises

In my next post I will give examples that all businesses are not necessarily social enterprises if by that we mean, to again cite The Social Enterprise Alliance, “use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas.”  I will follow that with an example of how a social enterprise (Goodwill Industries) and sustainability problems intersects.  I will follow that, eventually, with thoughts about how the new legal form, the B-Corp (http://www.benefitcorp.net), plays into the social enterprise dynamic.

 

  • By Stacy Neier on 2.27.2013 at 9:38 pm

    Dr. Benton! Thank you for sharing this post. My Marketing Research students are working with two clients this semester, and each client organization considers sustainable business practices in order place its product in the market.

    B-Corps are also relevant for the students. Although I realize you individually are not using Twitter, take a look at the eWOM to @BCorporation:

    https://twitter.com/BCorporation

    Looking forward to your next post!

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