SINGAPORE, 30 SEPTEMBER 2008 - Social enterprises could, and should, be the next step in the evolutionary process of business organizations, according to Dr. Ashok Khosla, Founder of Development Alternatives Group and one of the world’s leading experts on the environment and sustainable development.
Speaking at the National University of Singapore’s Lee Kuan Yew School of Public Policy last Friday (26 Sep), one of the key messages he struck was the need for greater exposure to social enterprises. Unlike purely business enterprises, which answer mostly to profits, social enterprises also give weight to the environment and social impacts, or what has come to be known in ‘green - speak’ as the triple bottom line of people, planet and profits (3Ps).
“The bottom line of profits is not enough,” said Dr. Khosla. “The world is using 30 percent more resources than is sustainable by the earth, all in the name of efficiency.”
According to him, one way in which this problem can be addressed is through social enterprises which combine development objectives with business strategies to “make it possible to do the right thing, the right way, and still make money.”
Do Good, Do Well
In terms of return on investment, traditional funding has typically sought high returns, high risk, and the challenge is to get investors to lower ROI expectations but still get good returns and still be able to feel good, as would be the case for social enterprises.
While social enterprises come in all shapes and sizes, some characteristics include a focus on the environment, sustainability, volunteerism, and long term outlooks.
“In terms of the taxonomy of corporate purpose, social enterprises do well by doing good,” noted Dr. Khosla.
He positions social enterprises at the apex of the Ladder to Corporate Heaven, where organizations, as they trade off private profit for social impact, move through stages beginning with public relations spin, and moving on to compliance, beyond compliance, philanthropy, and ultimately, social enterprise.
Certainly, Dr. Khosla’s Development Alternative Group itself embraces the concept of sustainability, and promotes sustainable national development in India. Its corporate objectives are to innovate and disseminate the means for creating sustainable livelihoods on a large scale, and thus to mobilise widespread action to eradicate poverty and regenerate the environment.
It has experienced many social enterprise successes and, through its projects, has not only made money, but turned barren hills to forests, turned from oil to biomass, and converted weeds to energy, which is sold at rates cheaper than the grid.
Disruptive Technologies
Dr. Khosla also points to some technologies that could completely disrupt current thinking with regard to environmentally friendly initiatives. In particular, he points to nature—the animal and plant kingdoms—and how biomimicry can play a key role.
Biomimicry is a relatively new science that studies nature, its models, systems, processes and elements and then imitates or takes creative inspiration from them to solve human problems sustainably.
He highlighted the case where the Eastgate Centre in Harare, Zimbabwe stays cool without air-conditioning and uses only 10 percent of the energy of a similarly-sized conventional building. It does this by studying how termite mounds are structured and ventilated.
The bottom line, according to Dr. Khosla is that the world needs to move towards social enterprises and sustainable development, or it will use up three times the resources available today by 2030.
