Could social enterprise be the future of activism?
Traditionally, activism and corporations have hardly gone hand in hand. But in recent times, with issues of social injustice and environmental collapse gaining awareness and decline of public faith in chaotic political governance, businesses could be the new leaders of social change.
From Corporate Social Responsibility (CSR) to Corporate Activism, corporations have long been involved (for better or for worse) with social movements across the world. Still, there are limitations to relying on traditional business to drive positive social change. In this post, I’ll discuss some of these contributions and limitations, before questioning whether social enterprise could be the key partnership needed for the future of activism.
WHAT IS ACTIVISM?
In its most basic terms, activism is simply the process of taking action with the end goal of bringing positive change.
This change could be social, environmental, political or economic. Action for change can involve promoting or discouraging something new, or attempting to alter existing systems. Activism normally occurs through collective social movements but can also be the actions of individuals.
CORPORATE SOCIAL RESPONSIBILITY IN RESPONSE TO ACTIVISM
CSR refers to efforts made by corporations to reduce harm and promote social/environmental wellbeing alongside their traditional financial goals.
CSR really began in the 1980s, as the corporate sector fell under criticism by activists for its damage to ecological and human rights. In these early days, CSR was largely ‘reactive’ in that it was used to safeguard businesses against such criticism. From the 2000s onwards, businesses began to develop more ‘proactive’ approaches to CSR – purposefully engaging in providing social and ecological benefits according to their own motivations.
CSR actions are often separated into three categories: Those which are strict legal or reputational necessities, those which are in high demand and can cause problems if ignored, and those that are truly opportunistic promotion of wellbeing.
Individual businesses vary the types of CSR they use, depending largely on their level of self-preservation, their willing to invest in common good, and their economic or reputational competitiveness. CSR is essentially a mixture of forced, planned and deliberated strategies which combine economic and non-economic business considerations.
While a large amount of CSR practice is motivated by capital-driven business agenda, these initiatives can support community integration, aid donorship and improved ecological benefits, all of which are important and necessary in creating positive social change.
There are plenty of examples of CSR which have brought some level of improvement to corporate sustainability. For example, several major clothing brands have started to incorporate organic and natural materials or provide the option of take-back schemes. Many restaurants boast locally sourced ingredients, and supermarkets are now filled with produce marked as fair-trade, Rainforest Alliance certified, organic or ocean friendly.
However, the extent to which these claims represent a full and genuine commitment to social and environmental benefit has been questioned, as more and more companies are called out for greenwashing behaviour.
Despite the successes that can be brought by CSR, these accusations of greenwashing point to the very real fact that when it comes to corporate commitment to sustainable and ethical values, doing ‘enough’ just isn’t enough.
Failing to put the necessary time and effort into CSR can lead to negative consequences being ignored or unacknowledged, increasing the struggles of some of the world’s most vulnerable communities.
For example, fair-trade initiatives in Oaxaca, Mexico, have been criticised for worsening the exclusion of those who don’t have the resources to be involved in coffee production. Similarly, micro-finance initiatives which fail to assure fair practice can lead to coercive lending and leave vulnerable people in spirals of debt.
Capital-driven motivation and under-researched CSR are much lesser concerns when compared to other criticisms. For example, it is often suggested that CSR protocols are simply a way for corporations to claim their ability to self-regulate, deflecting the proposition of interference by regulatory bodies.
Companies often face little accountability, as most regulation is not part of criminal law and instead falls under administrative law or guidelines from international organisations which are only binding in states that choose to sign them. In the worst-case scenarios, this lack of legal enforcement can even allow major disasters, such as the Bhopal gas tragedy of 1984 or the Volkswagen emissions scandal in 2015, to occur.
Although these are sinister and extreme examples of the consequences of corporate greed, everyday damage can be seen through high statistical rates of corporate fraud, pollution and work-related injury, which seem to suggest that enterprise is entirely incompatible with the actionable goals of positive change that come as part and parcel of activism.
FROM CSR TO CORPORATE ACTIVISM
Dissatisfaction with traditional CSR initiatives has seen the increase of a more organised and deliberated form of corporate support for social and environmental wellbeing – that of Corporate Activism.
Corporate Activism is when organisations use their influence to directly suggest or promote dramatic social change even if it puts their rational, economic goals at risk or is completely unrelated to their business’ success.
In this way, it is more actionable, more active, and therefore, more closely aligned with activism than the reactionary approaches of CSR.
Corporations have a notoriously high degree of power when it comes to shaping our societies, as they have the influence, connections and funding to engage in political lobbying, campaign sponsorship and public propaganda.
Sadly, this power has often been used to promote the greedy agenda of businesses where anonymised decision-makers seek to gain more, more and more. Throughout the years, various scandals have been exposed involving corporate connections to social policy making and their manipulation of social change efforts.
Some scarily recent examples include the lobbying of petrochemical giants against regulations on plastic waste, or the tobacco industry’s persuasion that they be allowed to continue production throughout the COVID-19 pandemic.
But the power of business is not always used destructively. Increasingly, corporations are using their power to demand widespread changes for social and environmental benefit. In other words, they are engaging in activism.
There are notable differences between CSR based on legal accountability or consumer demand and the more active approach of companies who genuinely wish to promote their values.
Studies have found that stock markets do not react to all forms of activism at all times. Specifically, it was found that corporate activism for LGBT rights or immigration does not always correlate with the improved reputation and income that might be expected from heavily marketing these values. This means that companies do not necessarily have the incentive to falsely portray their commitment, so when they continue to do so it could (at least in some cases) be genuine.
Furthermore, it has been noted that when major corporations are taken over by more liberal CEOs, they begin to engage more actively in driving positive social change – another indicator that real, human values can be at the heart of big business strategies.
For the most part, corporate activism does also benefit the traditional motivations of business, as the reputational value brought can overcome any losses made. However, engaging in new forms of corporate activism does risk the sacred, profit-oriented bottom line, and it is the willingness to accept this risk that distinguishes corporate activism from CSR.
For example, Ben and Jerry’s faced huge potential damage when they took a public stance against Donald Trump’s presidency, and when they refused to sell double-scoops of ice-cream during their protest for same-sex marriage legalisation in Australia. In both cases, Ben and Jerry’s polarised their community and lost the custom of those they angered or alienated.
Although corporate activism generally still has positive effects for business, society and the environment, it is often limited by traditional legal structures of business such as being limited by shares.
Most profit-seeking businesses follow this legal structure, which involves liabilities and decision-making power being shared between a number of individuals, each of whom have their own share of ownership in the company.
With multiple shareholders, it can be difficult for organisations to find alignment on their purpose and values. As businesses expand in size and complexity, this becomes even harder as with more board members being added, values need to be aligned between more people.
This is one of the major barriers to corporate activism, as different individuals and groups within a corporation struggle to come to agreement on what they stand for, or have their agreement too scattered and confused to have much success in refining it as their purpose.
With shared companies, liabilities are split so that each individual has some level of legal and financial responsibility to the others. Without coherent agreement, the possibilities for taking risky actions in pursuit of social change are limited.
IS SOCIAL ENTERPRISE THE FUTURE OF ACTIVISM?
Understanding the possibilities and limitations of corporate activism brings me to my final question. Could social enterprise be the future of activism?
The term ‘social enterprise’ refers to any organisation which considers social and environmental benefits within its core purpose.
Social enterprises are often set up as non-profits, cooperative models or charities. This allows them more freedom than traditional businesses in their action towards social change, as they do not have to accommodate the demands of those who do not share their values.
Though some social enterprises do opt for a limited by shares model, if they establish their purpose from the moment they are founded, then they can reduce the barriers of shared liability. By stating what they wish to do from the very start, value agreements and decision-making powers can be written into contracts which avoid any nasty controversies later down the line.
While each business model a social enterprise may take has its strengths, weaknesses and responsibilities; in founding a social enterprise the purposeful values are kept clear and are written into the organisation’s legal structure, enabling them to engage in actions towards the social change they seek.
Although it is possible for a traditional business to act as a social enterprise, through prioritising social and environmental wellbeing, the switch is difficult to formalise which leads to inconsistency or apathy that pushes corporate activism out of alignment with true seekers of social change.
So, we have established that social enterprises are generally more able to purposefully contribute towards social benefit that traditional businesses and that, in doing so, they further positive movements towards social change. But could they really be the future of activism?
Social enterprises use entrepreneurial methods to gain an income, the majority of which is, by definition, diverted back into supporting social and environmental wellbeing.
This means that social enterprises have a regular and legitimate source of funding, which is not necessarily available to traditional activists or activism groups. Furthermore, social enterprises are not perceived as rebellious. They do not stand so far outside of the status quo that they are alienated or criminalised, as is often a struggle of activism.
By operating within normalised, socially acceptable frameworks with secure and regular financial access, social enterprises have the capacity to direct positive social change for the benefit of people and planet.
They gain some of the powers held by traditional business, through their legitimate, formalised recognition as organisations and their relatively ‘good behaviour’ when compared to regular activist groups, but they are free from the constraints of economic obligation and shareholder liabilities.
In overcoming some of the difficulties faced by social movements while neatly bridging the gap between purposeful values and corporatised business, social enterprise might just be the best way to drive positive social change going forwards, fulfilling the aims of activism and building a better future for us all.