Why doing good is good business: An imperative for businesses to behave like social enterprises

HE Philippines has seen a fantastic rise of social enterprises that generate vital employment and empower marginalized communities. From producers of sustainable products such as bamboo bikes to digital apps that provide farmers direct access to consumers. In a new study done by the British Council and the Philippine Social Enterprise Network (PhilSen), there may be as much as 164,473 social enterprises operating in the country.

But are social enterprises merely in the realm of community based associations and nongovernment organizations? Social enterprises are organizations that apply business solutions to solve social problems. In so doing, they are necessarily businesses that strive to maximize profits while maximizing benefits to the society and the environment.

People-planet-profit has been the mantra of the triple bottom line framework that helps create greater overall value for the company. However, its operationalization remains elusive. But no less than strategic management guru Michael Porter has realized the unintended offshoot of his five-forces industry analyses model that perpetuates the extreme competition, jostling of bargaining powers, and profit maximization at the expense of stakeholders. Since then, he enjoined businesses to practice creating economic value while simultaneously creating value for society and the environment. Businesses and entrepreneurs are by and large change agents, who can tap into their creativity and resourcefulness to reimagine sustainable products, services and practices.

In response to clamors for increased transparency and accountability, the Securities and Exchange Commission in February 2019, published the sustainability reporting guidelines for publicly listed companies (PLCs) – not only in the reportage of financial matters but also as regards economic, environmental and societal sustainability challenges and the company’s resultant response. But such duties should not be the exclusive responsibility of the PLCs. A parallel or equivalent set of metrics can be adapted to the context of micro, small and medium enterprises, and non-PLCs.

Another bright light has been the articulation of the Covenant for Shared Prosperity last November 2020 by 26 of the most influential business groups in the country. The covenant is a pledge to promote inclusive and fair business practices, which encompassed various stakeholder-centric undertakings. The call-to-action came as the lockdowns and ensuing business disruptions due to the pandemic have driven more Filipinos into poverty and dire straits. That the unabated, unfair, and opportunistic business practices thus far have contributed to the gnawing socio-economic gap – which only exposed the country’s vulnerability in handling the adverse effects of the economic crises.

With more of these welcome initiatives, business owners can realize that making profits and doing social good are not mutually exclusive goals. As companies have the scale and wherewithal to create greater impacts, these are the justification it needs to blur the lines between mainstream business and social enterprises.

Geraldine “Dina” Go-Bernardo is a lecturer of strategic management and sport management at the De La Salle University Ramon Del V. Rosario College of Business. She is also a Research Associate of the Business for Human Development Network (BHDN). The views expressed above are the author’s and do not necessarily reflect the official position of De La Salle University and its faculty and administrators.