Social innovation needs $1.1trn – these companies just committed to act

During Davos 2024, this year’s Annual Meeting in Davos, Switzerland, a dozen companies signed the Rise Ahead Pledge, committing to increase investments in social innovation and inviting others to join them to help advance social innovation globally.

Social enterprises – revenue-generating organizations prioritizing purpose over profits – are growing worldwide. New data suggests that over 10 million social enterprises generate an estimated $2 trillion in annual revenues globally – more than, for example, the apparel or telecommunications industries. This new data was surfaced by the Schwab Foundation’s Global Alliance for Social Entrepreneurship at the World Economic Forum in partnership with Bertelsmann Foundation, Catalyst 2030, Euclid Network, SAP, Social Enterprise UK and the Social Enterprise World Forum.

Social enterprises are also gaining increasing recognition from global policymakers. In 2023, the UN General Assembly adopted a resolution on the social and solidarity economy for sustainable development. For the first time, the resolution recognized the contribution of social enterprise towards sustainable development.

In addition, increased policy momentum can be seen globally, such as the European Union’s Action Plan on the Social Economy, the African Union’s 10-year Strategy on the Social and Solidarity Economy or national strategies on social innovation in Brazil or Germany.

But despite social enterprises’ significant economic contribution and commitment to sustainable development, the new data finds that they still face a $1.1 trillion funding gap. That is why the Rise Ahead Pledge is a critical inflexion point for private-sector collaboration with the sector. Pledge signatories show how the corporate sector can contribute to and benefit from social innovation.

SAP's commitment extends beyond financial investment. The company supports policy advocacy benefiting social enterprises and invests in resources to scale the social economy. In Europe, SAP matched funding offered by the European Commission to scale the efforts of organizations, including the Euclid Network, Social Enterprise World Forum and Social Enterprise UK, to lead the Buy Social B2B Europe movement.

Globally, SAP's investments in ecosystem building are spanning key markets in 2024, including India, Brazil, the United States and several African countries. Notably, SAP also engages its employees in these endeavours, connecting their skills and expertise to meet the needs of social innovators through pro bono consulting programmes such as the TRANSFORM Support Hub.

Microsoft supports impact entrepreneurs dedicated to societal and environmental betterment. This initiative includes a breadth of programmes offering access to Microsoft's technologies, intensive support for selected startups and leadership development, all aligned with Microsoft's mission to empower a better future.

Since 2012, IKEA has been purchasing and co-creating products with social entrepreneurs, emphasizing long-term business partnerships. IKEA's plans include launching product families in its retail markets and increasing support for social entrepreneurs through accelerator programmes, funds and direct support. This approach not only fosters business growth but also creates job opportunities for vulnerable groups.

Through its Foundation S, Sanofi has pledged $42 million through 2030 to support community-led adaptation solutions to climate change. Collaborating with Global Grand Challenges Africa and other notable foundations, Foundation S’s efforts focus on the intersection of climate change, health, agriculture and gender, showcasing the power of public-private partnerships in addressing critical global challenges.

Through its Lex Mundi Pro Bono Foundation, the company increases pro bono legal support to social entrepreneurs, creating and disseminating legal resources and building a supportive legal ecosystem. This initiative underscores the importance of diverse forms of support to the social economy.

In 2015, SK Group launched the “Social Progress Credits” through its foundation, the Centre for Social Value Enhancement Studies, to measure social performance, or the degree to which social enterprises solve social problems, in monetary terms and provide financial rewards based on the result.

So far, SPC has involved 326 social enterprises that generated approximately $248 million in monetized social performance over the seven years through 2022. SK Group paid the participating social enterprises $40 million in cash incentives in proportion to their social performance. With its experience of this signature social innovation initiative, SK plans to nurture the social innovation ecosystem.

The Bayer Foundation supports social innovators in the Global South at the intersections of health, nutrition and the environment. Through its programmes, it provides financial and non-financial support to social innovators and their ecosystems. It aims to identify innovations with inclusive business models and work with partners to catalyze additional resources for these social entrepreneurs.

The EY organization collaborates with leading impact investors and entrepreneurship networks to provide a variety of skills development and coaching programmes. It provides digital tools and resources to support impact entrepreneurs at every stage of their journey. It collaborates with leading organizations such as Acumen, Unreasonable, Impact Hub and Ashoka, and EY clients, including Unilever, Microsoft, and SAP, to help impact enterprises’ scale.

As the global corporate foundation of the Adecco Group, the Innovation Foundation provides support and acts as a catalyst for system change. It runs as a Social Innovation Lab - a venture studio for society. The foundation identifies unsolved social challenges related to employment and employability and then mobilizes various actors to co-create concrete solutions.

Via its replicable model, the Innovation Foundation provides financial and non-financial resources to social innovators who engage as entrepreneurs in residence, venture leads, innovation fellows and other partners. It emphasizes open-sourcing new models so that other players can adopt these.

Kale has managed a comprehensive social entrepreneurship programmes portfolio in Türkiye since 2017. The programmes include a competitive, annually held non-dilutive award programme (IBSG), a youth academy to empower future social entrepreneurs(DIBA), and an emergency response grant program for IBSG laureates. Kale Group considers the financial sustainability of the enterprises and decreasing their dependency on external funding to be the top priority.

Kale Group pledges to gradually redesign its monetary support scheme as impact investing and capacity-building accordingly. Kale Group also aims to build a more dynamic and diverse community and extend the scope of its academy to secondary education. Collaboration with the private sector, policymakers and advocacy groups is another core pillar of Kale’s vision as a thought leader.

SUEZ has a long tradition in social innovation and has been a partner for social entrepreneurs for many years. Its social innovation approach delivers social and environmental solutions that help SUEZ differentiate, nurture the group’s purpose and adapt to HR evolution. Suez’s approach includes business partnerships with social entrepreneurs and access to essential services, inclusive recruitment programmes targeting vulnerable populations, social procurement and employee volunteering programmes. The company also develops an “in-house” social business (Rebond Insertion), with more than 700 employees with disadvantaged backgrounds and co-operates with social startup accelerators in the field of circular economy.

Based on over 115-years of tradition, the Melitta Group is committed to sustainable transformation. It considers social innovation and social business a precondition for successful transformation by enabling and fostering fair partnerships at eye level. The group establishes social ventures at the core of its business, collaborates with and supports social innovators, and fosters their growth by buying their products or services. The Melitta Group commits to continuously extend its social innovation measures and expects a positive impact on its business by innovating sustainable products and services for its customers.

With at least half of the world's population unable to access essential health services, Medtronic LABS is on a mission to change the way care is delivered and measurably improve population health outcomes for patients, families and communities across the world. Supported by Medtronic and other partners, the nonprofit works with the private and public sectors to design and scale tech-enabled models that transform community health and primary care. Its SPICE platform, a next-generation open-source digital tool for health systems, enables a shift towards a data-driven, community-centred approach to primary care. To date, Medtronic LABS and partners have improved clinical outcomes for over 117,000 patients in sub-Saharan Africa, Asia and the United States.

A landmark report, the Corporate Social Innovation Compass, complements the pledge, covering more than 10 mechanisms for companies to partner with social innovators, the benefits and the journey that companies take when engaging with social enterprises. The report was co-developed by a diverse steering group of social innovators, impact investors, academia, companies and corporate foundations, led by the Schwab Foundation, the Global Alliance for Social Entrepreneurship and Deloitte.

It finds that social enterprises can innovate and drive change for companies as they are successfully working at the intersection of business, environment and society. With their commitment to increase funding and non-financial support for social innovation, the signatories of the Rise Ahead Pledge are leading the way in leveraging social innovation to build a more equitable and sustainable future.

As more companies join this initiative, they will help bridge the $1.1 trillion funding gap and help make social innovation the norm, not the exception.