By Emily Darko – Director of Research at Social Enterprise UK

New SEUK research shows that social enterprises are taking more action than other forms of business in tackling climate change – but is that enough?

Many social enterprises are at the forefront of innovative product and service design to address critical aspects of the climate emergency. Social enterprises are also more likely to be committed to climate action in their day-to-day operations.

However, along with the rest of the world, social enterprises are emerging from 18 months of COVID-19 challenges. They are pioneering a vast range of solutions to social and economic issues. Lots are start-ups, many operate in the most deprived parts of the country. For several, climate simply isn’t the number one emergency on their to do list! But can social enterprises afford to put off engaging on climate? And in doing so, are they missing a trick as well as taking a risk?

Who are the environment-mission social enterprises?

Social enterprises are businesses that operate with a core social and/or environmental purpose. So how many are ‘environment-mission’ social enterprises?

3% of social enterprises describe their principal trading activity as ‘environmental’ and 20% say that their main social/environmental objectives include ‘addressing the climate emergency[1]. Around 14% currently deliver climate-related products and services[2]. So we’re talking roughly 14,000-20,000 businesses[3].

We’ll be publishing detailed information about green products and services available from social enterprises next month – but here’s a snapshot of environment-mission social enterprises[4]:

  • Representative leadership: 57% are led by women, 18% are led by people from racialised communities.
  • Established, with growing start-ups: Operating for an average of 9 years. 28% started up in the last 3 years, 8% are over 20 years old.
  • Small, gender parity teams: Have an average of 7 paid staff of whom 50% are female.  
  • All legal forms: 48% operate as Companies Limited by Guarantee (CLG), 40% as CICs (some of which are CLG), 22% companies limited by share and 9% IPS.
  • Across economic sectors: trading across agriculture, business support, community services, creative industries, culture and leisure, domestic services, education, employment and careers, financial support and services, health and social care, hospitality, housing, IT, manufacturing, retail, transport and utilities.
  • Addressing a multitude of social challenges: as well as climate, 38% are supporting people into employment, 34% are benefitting particular communities, 31% are improving mental health and wellbeing, and 25% are supporting other social enterprises.
  • Inclusive employers: 54% seek to employ individuals from disadvantaged groups
  • Income from trading outside public sector: 40% generate most of their income from trading with the public, and a further 22% from trading with the private sector and social enterprises.

Climate commitments

Whether or not it’s a primary focus, social enterprises care about climate. As a whole, social enterprises are:

Putting their money where their mouth is: 84% of social enterprises say that when buying products, they weigh social and environmental impact equally or as more important than cost.

Making legal commitments: two thirds (67%) have either included tackling climate change/climate emergency in their businesses governing documents – or are considering doing so. This figure rises to 77% of social enterprises set up in the last year.

Investing in energy efficiency: nearly three times as many social enterprises have installed energy measures in the last 12 months compared to other businesses.

Net zero ready?

As carbon neutrality becomes a more central part of political and economic discussions, businesses face increasing pressure to take action. From voluntary initiatives such as the government’s Business Climate Hub and the UN’s Race to Zero campaign, to formal requirements to report on carbon reduction commitments in public procurement[5].

From SEUK’s October Social Enterprise Advisory Panel survey, we found that 37% of social enterprises are already carbon neutral or expect to be within the next five years.

However, 46% are yet to identify how – or if – they will become carbon neutral.

Overall, social enterprises want to become carbon neutral, many know that they already are – or are confident in steps they are taking towards carbon reduction. Several offset their carbon emissions.

We have taken a proactive approach to avoiding energy and resource waste including by using home offices, shared/public transport, reducing printing and use of green printing methods for e.g. a very small number of annual reports. We have not formally assessed whether we are ‘carbon neutral’.

However, many told us that they lack information about how to approach carbon reduction. They don’t know how to calculate their carbon impact and they want advice on initial steps to take.

We […] are trying to build in sustainability measures to our modest growth.  We’re not sure where to start in making it happen or where to find the capacity.

Other than heating/energy our impact is very small (I think?). It would be good to have ideas how to make an office carbon neutral to see what others are doing.

There is significant concern about how the low carbon transition will be financed. For social enterprises reliant on equipment or vehicles or infrastructure, adaptation costs could be significant.

“To become carbon neutral we would need to replace (our) vehicles, at significantly greater cost than standard fuelled vehicles with clients who want to see zero (tailpipe – there is no true zero emission vehicle) emissions but who will not have the money to pay for such significantly increased costs. The infrastructure is also not there, and the reality of electric or hydrogen fuel is far from resolved.”

COP26

We also asked social enterprises for their perceptions on how COP26 will affect social enterprise. There is pretty wide spectrum of thought on how useful the conference will be…

I think it is probably the most critical conference in the world right now.

It won’t do nearly enough. If we’re lucky we may see a change in attitudes […] and increased engagement around environmental support.

“COP26 will be a waste of time because the changes we need are far more fundamental […] We need a revolution!

Many social enterprises noted how climate competes with other issues, which although often related to climate, distract focus on longer-term shifts needed to build an inclusive low carbon economy:

Rising inflation and the huge rise in energy pricing is forcing people to think very short term.

There was general consensus that the voice of social enterprise won’t be heard, and that any impact felt is unlikely to be immediate…

“I assume social enterprises will be generally ignored and will not have any mention at COP26 as part of the UK economy. In a perfect world, they will announce a radical shift to a circular/more sustainable economic model, but I am not holding my breath.” 

That said, a number of social enterprises will be playing a role at COP26, and respondents are optimistic that the event is at least raising the profile of climate action:

“I can only hope that COP26 can lead to the same energy, action and investment that we saw during Covid. I’m still shocked how much ignorance is around concerning climate change. I hope this can attract a wider audience and […] provide more funding for carbon neutral social enterprises, including ours.”

“It is vital that this is a focus and social enterprise should be leading the way.  Costs will potentially impact on our customers as well as those we seek to support.”

Social justice is climate justice.

Beyond COP, we know that social enterprise has a critical role to play in a greener and fairer economy and society. The data above shows that they are starting from a position of strength.

Environment mission social enterprises are not only pioneering sustainable and scalable businesses –  they are doing so in socially inclusive ways. They are not making a fast buck at the expense of the communities they operate in.

Many social enterprises need support to reach their potential on climate, because they are so focused on their social missions. But they increasingly recognise that there is significant overlap between social and environmental issues. The current crisis around gas-fuelled energy prices and its impact on the poorest in our society is but one example of why social justice cannot be achieved without climate justice.

Check out our sessions on climate at Social Enterprise Futures which will look in greater detail at the fallout from COP and the role of social enterprises in tackling the climate emergency. Find out more and get your tickets here.

SEUK would like to thank Barclays for their sponsorship of the State of Social Enterprise survey. And Big Society Capital and PricewaterhouseCoopers for their sponsorship of the Social Enterprise Advisory Panel surveys, data from which formed the basis of this blog.


[1] https://www.socialenterprise.org.uk/state-of-social-enterprise-reports/no-going-back-state-of-social-enterprise-survey-2021/

[2] Based on analysis of SEUK membership, which will be published next month (Nov 2021)

[3] Using the 2018 estimate of there being 100,000 social enterprises in the UK.

[4] Based on averages of those who said their principal trading sector is environment and those that said ‘addressing climate emergency’ was one of their main social/environmental objectives.

[5] https://www.gov.uk/government/news/firms-must-commit-to-net-zero-to-win-major-government-contracts