Everyone talks about being sustainable and green. Many companies consider themselves as social enterprises, but how many of them actually create impact?
In fact, many social enterprises have very little social impact. I have done a lot of consulting work, as well as verification work for B Corp, and I’ve seen companies apply for Brands for Good awards — and many companies are simply trying their luck.
In Singapore, there is an organization called raiSE which was set up in 2015 to develop the Social Enterprise sector in Singapore through a cross-sector collaboration between the Ministry of Social and Family Development, National Council of Social Service, Social Enterprise Association and Tote Board to develop the social enterprise sector in Singapore.
Many companies assume that they are a social enterprise because they declare so. A company sells very expensive burgers and donates $1 for every burger sold. Some companies donate 1% of their profits to charities and also register as social enterprises.
From the outside, these companies may sound like they are doing something good. However, on closer examination, I’ve found that some companies that donate 1% of their profit distribute out most of profit dividends, and as a result, less than 0.1% of their revenue is donated. The company that donates for selling burgers — well, they only donate when you buy the most expensive burgers and not all burgers.
I’ve also seen companies hiring handicapped and ex-convicts in their operations. It seemed like a great thing to do, offering employment opportunities to the marginalized, however, upon closer examination, this is done because of government grants which match 50% of the salaries for 6 months, and at the end of this period, they will request for an extension of another 6 months of trail to get more grants. At the end of the grant period, the majority of the employees may face a pay cut, or they company will find an excuse like — you were late 3 times this year, so we have to let you go. Then the company hires new employees at the discounted rates again just to pay less payroll.
There are car companies that have pivoted to electric vehicles, but in fact, they are earning most of their profits from loans and from high service fees when you…