For example, German companies support environmental projects in developing countries.
(Photo: Reuters)
Dusseldorf Social enterprises are playing an increasingly important role in Germany. This is shown by the results of the German Social Entrepreneurship Monitor, which are available to the Handelsblatt in advance. For the fourth time, the Social Entrepreneur Network Germany (SEND) has compiled current data in detail. 16.7 percent of the 360 companies surveyed were just started last year.
Social enterprises want to achieve a common benefit, i.e. improve education, participation and climate protection with entrepreneurial means.
The study also shows the reasons for the trend: Firstly, more and more young people want to work in a meaningful way. This works particularly well with social enterprises, which by definition want to make the world a better place.
Second, the general interest in solving social and environmental problems through entrepreneurial means is increasing because the pressure is increasing and time is short. For example, the company ZuBaKa has been supporting more than 1,700 immigrant children and young people with language support needs in the Rhine-Main and Rhine-Neckar region since 2016.
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Plastic waste is collected at Wildplastic from Hamburg. The collectors who pick it up on beaches in developing countries or fish it out of rivers are paid fairly. Recycling products are made from the collected plastic.
Thirdly, consumers are increasingly keen to buy products that meet ethical, social and ecological standards. And fourthly, more and more investors are getting involved in social enterprises who want to give at least part of their money specifically in impact investments, i.e. investments that have a positive effect on the environment and society. Investors include family offices, special funds, but also Dax companies like SAP are committed to involving more social enterprises.
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According to the Monitor, there are some special features of social enterprises compared to other start-ups: More than three quarters of the founding teams of the social enterprises considered in the Monitor are at least gender-mixed; more than every fifth social enterprise was set up exclusively by female founders. For comparison: According to the annual report by the analysis company Startupdetector, only 20 percent of start-ups have a managing director.
55 percent of social enterprises finance themselves from their own savings
Social enterprises are also much more regional than normal start-ups. The founders who took part in the monitor are distributed very differently across the federal states: Most of them, at almost 20 percent, settled in Berlin, closely followed by North Rhine-Westphalia, Bavaria, Hamburg and Hesse. In Mecklenburg-Western Pomerania, on the other hand, there is not a single one.
More than 85 percent of those surveyed usually use their profits exclusively for organizational purposes. So far, more than 55 percent of social enterprises finance themselves from their own savings, and just under half use public funds. So far, they have received little venture capital, but that is about to change.
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Exciting for companies and financiers: Not only consumers, but also corporations are increasingly relying on products or services from social enterprises. This strategy is known as “buy social”. SEND recently launched the Buy Social Germany initiative in cooperation with the IT group SAP.
The topic of sustainable and social procurement is becoming increasingly important, says David Korenke from SEND. “An increasing number of companies have recognized the importance of making their supply chain sustainable. Social enterprises have a special place in this because their purpose is to have a positive social impact.”
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Companies like SAP, Johnson & Johnson or Zurich would have recognized that. They were actively looking for suppliers in the social entrepreneurship sector. As the monitor shows, at 54 percent, more than half of social enterprises already sell products and services to other companies. 22 percent want to do this in the future.
SAP, for example, has launched another company-wide campaign. It aims to spend 5% of addressable corporate spend on social enterprises and 5% on diversity-focused companies by 2025. Alexandra van der Ploeg, Global Sustainability Officer at SAP, explains: “We want to inspire more companies to buy more goods and services from socially committed suppliers and thus have a positive impact on societies.”
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