Is business a useful tool to resolve social challenges?

Is business a useful tool to resolve social challenges?

In 2015, the United Nations was responsible for collecting all the global challenges in a single document known as the Sustainable Development Goals addressing various issues ranging from reducing poverty, inequality to climate change. The achievement of sustainable development goals has to be completed by 2030. We are used to thinking that who has the resources to resolve social problems? is it the government? or the third sector which also includes civil society organization but it is not common to believe that the private sector “the business” could be also a tool for providing solutions?! as they are making a profit in finding solutions to the problems and challenges they have contributed to their creation. For all those who are sharing this thinking, the desire of growing up has led to a race where companies seek to produce, to acquire raw materials and productions at low costs. National governments and international institutions have placed support for businesses at the heart of their development strategies, based primarily on the link between business and economic growth.

According to UNICEF’s report, business causes environmental pollution through smoke, chemicals, and sound, which has a great impact on health. For instance: only 100 companies are responsible for 71% of global emissions. Regarding other problems; the work conditions are not good very often. Jobs that businesses create are usually dangerous for people and accidents can occur easily!. Moreover,  the wages are not enough for a living. In the middle of all the social problems, we have to pay attention to child labor. Based on the International Labour Organization report, worldwide 2018 million children between 5 and 17 years are in employment. Among them, 152 million are victims of child labor; almost half of them, 73 million, work in hazardous child labor situation. 

 

Figure 1: Number and percentage of children in child labor and hazardous work, by region, 2016. Global estimates of child labor: Results and trends, 2012-2016. International Labour Office.

 

It is important to say that although these problems are current, some companies have tried to do things right. Being supervised or making an effort to respect the laws and ethics are some of the companies’ achievements. Even so, it is still necessary to scale on the questions that would be essential because business is stagnant on improvement measures.

The new thinking perceives business as a needed tool to solve social problems. Companies make the real profit showing respected procedures, following the standards and enforcing the laws of pollution, promoting human rights, etc. Paying fines and repairing accidents can be more expensive for companies than meeting the standards. American academic, Micheal Porter, introduced us the key of shared values, in other words, the creation of a deep synergy between social progress and economic efficiency where we can find the accurate balance. So, using a business model to tackle social issues is new thinking that some enterprises are employing. Business has to meet social needs through products instead of competing for trivial issues and economic needs defined by the market. In addition to improving the local business environment would help to be reliable among the population. Not all societal problems can be solved through shared value solutions but the shared values offer corporations the opportunity to use their skills, resources, and management capability to lead social progress in ways that even the best-intentioned governmental and social sector organizations can rarely match. If we had to translate the concept of shared value in a practical way, we would say social entrepreneurship. This kind of business formulates a tangible impact on communities while solving social urgent problems using a business model that is profitable and scalable. Every time, there are more social entrepreneurs dedicated to solving global challenges through a business model.

Following the example above, GoodWave International is a social entrepreneurship that aims to stop child labor in the carpet industry and to replicate its market-based approach in other sectors. It works through its certification program to end child labor and to offer educational opportunities to children in weavings’ communities. Companies that sign as GoodWave licensees have to open their supply chains for inspection on a surprise. For rugs, products receive uniquely numbered certification labels, designating them as child-labor-free. This relationship with licensees leads to the needed change in behavior and business practices, making “no child labor” a market requirement for their producers.

 

Figure 2: Retrieved from

 

It is said that business solving social problems does not sound very desirable but if there is one thing that we cannot deny is the significant power that it has been in our societies. However, business solutions will always be a tool, which should be evaluated related to the specific problem issue, the context and its alternatives before it should apply. Currently, we are facing global challenges that need the creation of partnerships between business, governments, and NGOs. Any institution can lead the change alone and this could not be possible if we do not change how the business sees itself, how others see business and if we do not break this tension.

 

Carla Sala


Sources:

International Labour Office. (2017). Global Estimates of Child Labour. Retrieved from

Porter, M. (2013, October 7). Why business can be good at solving social problems. [Video file]. Retrieved form

Riley, T. (10 July 2017). Just 100 companies responsible for 71% of global emissions, the study says. The Guardian. Retrieved from

Schwa foundation for social entrepreneurship. Retrieved from

SCIAF. (2014). The impact of big business on people living in poverty.

UNICEF and Save The Children. (2011). How business affects us. Children and young people share their perspectives on how business impacts their lives and communities. Retrieved from

United Nations. Sustainable Development Goals. Retrieved from

 

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