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What is a social enterprise?

Profitability and responsibility

Socially responsible companies are those that, in addition to profitability, aim to have a positive impact on the social and environmental surroundings. Placing people at the center, reinvesting profits, promoting internal solidarity and solidarity with society in a way that favors local development are some of the pillars on which entities affiliated with the social economy are based. This is what is set out in Law 5/2011, of March 29, on the Social Economy. This is the legal framework that, to a certain extent, serves as a backdrop for social entrepreneurship, a type of enterprise that is not only profitable as a business, but also has a positive impact on society and the environment.

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What is a social enterprise?

Social enterprises are a type of entrepreneurship that combines profitability with the objective of addressing and solving social or environmental issues.

In Spain alone, there are more than 43,100 organizations whose corporate social responsibility fits this description. The report entitled The Most Relevant Companies in the Social Economy 2021-2022, prepared by the Spanish Business Confederation of Social Economy (CEPES), also points out that these organizations generate 2,184,234 direct and indirect jobs and their turnover represents 10% of GDP.

Social enterprises are, therefore, the result of an entrepreneurial vision that goes beyond profit and seeks to generate a positive impact on the world. The purpose of social entrepreneurship transcends mere economic profitability. To speak of a socially responsible company is to refer to a type of organization that not only seeks to make a profit, but also focuses on generating a positive impact on society and the environment through corporate social responsibility.

Characteristics of a social enterprise

  1. Quality employment
    Hidden behind the cliché "make the world a better place" is one of the cornerstones of social entrepreneurship. Improving peoples' lives is part of the very essence of any social enterprise and the creation of decent, quality jobs is, from this perspective, one of the key elements in generating wealth in society.

  2. Innovation
    Another important characteristic of social enterprises is their focus on innovation. They seek to find creative and disruptive solutions to social and environmental challenges by developing new products, services, processes, or business models. Innovation becomes a powerful tool to foster change and generate a positive impact.

  3. Involvement
    Socially responsible companies tend to get involved in the communities in which they operate, working collaboratively with different stakeholders, such as NGOs, local governments, and community members. They seek the active participation of these stakeholders to maximize their impact and ensure the sustainability of their initiatives.

  4. Reinvestment of earnings
    Corporate social responsibility also tends to drive these types of organizations to reinvest part of their profits towards achieving their social objectives. These resources are generally used to finance and expand programs and projects that have a greater impact on society.

  5. Transparency
    Social enterprises -like the rest of the business network- comply with all transparency regulations in their operations and communications. They can adopt various legal forms, such as cooperatives, foundations, limited liability companies... The most important aspect is for their business model to be backed by a solid strategy that combines revenue generation with the pursuit of making a positive social and environmental impact. In addition, they usually have a participatory and transparent governance structure and strive to be held accountable by their stakeholders and to monitor their progress towards their social objectives.

  6. Triple impact 
    Social enterprises seek to address social challenges, solve community problems, and contribute to the common good of society through their business activities and, for this reason, their objective is to generate a triple impact:
  • Social Impact
    They focus on generating a positive impact on the society and communities where they operate. They can promote educational programs, foster equal opportunities, provide employment to people in vulnerable situations, or support community development projects.
  • Environmental Impact
    Social enterprises are also concerned about taking care of the environment. They can implement sustainable practices, reduce their carbon footprint, promote the circular economy, or develop clean technologies.
  • Economic Impact
    In addition to being profitable, they also seek to be economically sustainable. They sell products and reinvest in fulfilling social and environmental missions. They are able to balance the well-being of people, the planet, and economic profitability.

Examples of social enterprises

Throughout the world, we can find numerous inspiring examples of social enterprises, such as those invested in by Repsol Social Impact, a social investment fund that Repsol has set up through our Foundation.

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This is the case of Hispaled, an insertion company specialized in energy efficiency solutions in the field of LED lighting, which promotes the social inclusion of young people at risk of exclusion through a personalized itinerary in the workplace. But there is more.

Koiki, a responsible delivery company committed to more sustainable deliveries and the integration of people with labor insertion difficulties; Recycling4all, a social enterprise created in partnership with Ilunion (ONCE Social Group); Grupo Sylvestris, specialized in large-scale reforestations as a means of offsetting CO₂ emissions; or GNE Finance, a comprehensive rehabilitation agent that makes energy efficiency accessible to all, are other examples of the company's commitment to socially responsible companies.

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In Spain there are also other inspiring examples such as Adopta un Abuelo, Maximiliana, Ayúdame3D, L'Olivera... Social enterprises with a national seal that aim to make a positive impact on society in different areas. And the same is done beyond Spain's borders by companies such as Grameen Bank (Bangladesh), a benchmark in the field of microfinance; TOMS Shoes (United States), a footwear company known for its 'One for One' model, or Fairphone (Netherlands), which produces ethical and sustainable cell phones.

Considering that the success of a social enterprise is not only measured in financial terms, but also in terms of its ability to generate significant change in society, these are just a few examples of how organizations can become agents of change and prove that it is possible to combine profitability with social and environmental responsibility.

Value chain

The value chain examines in depth the activities of the company to understand their costs, current sources, and competitive advantages over the competition.

All about the value chain