Opinion

What if social entrepreneurship became business as usual?

Ruby
WRITTEN BY

Ruby Au

Ruby is a former social business founder and current Head of Ecosia North America.

A few weeks ago, I sat down with other members of Ecosia’s team to define our company objectives for the upcoming quarter. We were video conferencing from our homes due to COVID-19 policies that kicked in weeks prior. “Maybe we should donate search profits to the production of medical supplies for a while?” suggested one colleague, “it doesn’t feel like we’re doing enough”. “What about supporting the local businesses that can no longer make money? Or local artists?” suggested another. Our team bounced ideas back and forth, when it suddenly struck me how odd these conversations were. As with many other companies, we saw our revenues take a hit in the weeks following the Corona pandemic. We should have been nose diving into charts, numbers, and conversations about how to “turn things around”. Instead, the conversation kept straying towards initiatives to sew masks for the homeless, or deliver food care boxes to local initiatives. And this was… normal. Expected, even.

In part, it’s a testament to the changing times. As in all times of crisis, people are coming together to support in whatever ways they can. However, it’s also a testament to the type of company that Ecosia represents: a purpose-driven social enterprise and B-Corp. We are a social business and tech-for-good company that measures its milestones in terms of trees planted, rather than dollars generated. In many ways, we are the antithesis of the capitalist dream. We are making millions - only to give the money away to plant trees (take that, Adam Smith). And while giving away the majority of your business profits is hardly the impetus driving droves of millennials to thousand dollar MBA programs, it's an idea that resonates now more so than ever. In the past month, the search term “social business” has peaked to its highest ever levels of interest in the U.S. But despite our tendency to look to entrepreneurs during times of crisis, Ecosia’s model of investing in social good rather than shareholder returns is still the exception that proves the rule in a capitalist landscape. The pause created by the Corona pandemic should serve as a moment of reflection that forces us to challenge our norms, question why the rule of capital is dictated by shareholder interests, and realigns our expectations of business back towards the realm of social good.

At first glance, Ecosia’s business model is not so very different from that of other search engines. As our users search, we capture profits from ad revenue. But 80% or more of our profits are funneled into a “tree fund”, or directly into tree planting projects around the world. Using this model, we have invested nearly 13 million euros to plant over 90 million trees, and grown into a multi-million dollar business that hasn’t raised a single dollar from VC investors. This has allowed Ecosia to retain full control of its impact mission - both now and in perpetuity. In October 2018, Ecosia’s founder Christian Kroll handed the stewardship of Ecosia over to the Purpose Foundation, making a legally binding commitment that the company shares can’t be sold at a profit or owned by people outside of the company, and that no profits will be taken out of the company. In summary, the only shareholder value that we will ever generate is for the trees we plant. It’s enough to make Wall Street squirm.

I’ve worked for multiple social enterprises prior to joining Ecosia - companies that measure their core success in terms of impact generated, rather than profits preserved. These have ranged from a venture that produces fertilizer using human waste collected from slum toilets; to a company that developed a free and offline-enabled operating system for last-mile communities; to my own former start-up, which leveraged SMS survey technology to provide rural students with digital education. What each of these companies have in common is an organic link to their communities - something that the shiny corporate faces of Silicon Valley pay millions of dollars to maintain. Because the truth is, human relationships are the building blocks of every social enterprise, in much the same way that shareholder returns are the building blocks of every IPO. Once upon a time, businesses began as social institutions. They were the milkman who dropped bottles at your door, the hairdresser that listened to your family woes, and the mechanic who would help fix your kid’s bike for free. They existed as a response to needs they saw in their communities, and were driven by the relationships they built as part of their communities. Social enterprises and social businesses inherently understand this dynamic.

The reality is, there has never been a time when the return of businesses to their role as social institutions and community citizens has been more necessary. As the present pandemic has swept over the world’s economies, we’ve started to question the norms that we usually take for granted. And as we quarantine inside our homes, the importance of communities has come back into full focus. While COVID-19 continues disrupting routines, new products, services, and ways of living are needed. New entrepreneurs, start-ups, and businesses will emerge to fill those gaps. Primed on the tipping point of change, now is the perfect time for us to reflect on what we want a changing norm to look like. As of late, business as usual has focused on maximizing profits to increase returns. But what if social impact, rather than dollar growth, became a primary standard that we measure business success against? What if, in summary, social entrepreneurship became business as usual?

In a time when every aspect of life is already being disrupted, our perception of the role of businesses is one thing that can, and should be disrupted. Somewhere between the glitz of Silicon Valley and the glitter of Jeff Bezos’ fortune, entrepreneurship has shifted from building dreams to building billion dollar, venture backed companies that build wealth for shareholders. “Scale bigger”, investors demand, “if your company can’t scale then you’re not creating enough unique value”. But Ecosia and other social businesses around the world have pulled back the curtain on the false belief that businesses should exist purely to increase shareholder value. Instead, we have shown that it is possible to leverage a commercially successful business model to drive positive societal change as its first and foremost responsibility.

Now take that and apply it to the world you know. What if, for example, Google’s parent company, Alphabet, invested its $34.34 billion of 2019 profits into reforestation efforts? With that amount of money, we could plant over 150 billion trees, remove an estimated 7.8 Gigatons of CO2 from the atmosphere over their lifetime, and make a huge dent in carbon emissions (for context, we released 33 Gigatons of CO2 into the atmosphere in 2019). And while that may be an extreme example, I’m not necessarily advocating that everyone starts plowing 100% of their profits into social or environmental good. That’s not realistic. Rather, I’m arguing that difficult times have shown us that companies can and will find the money to invest in social good when the need is felt, and the expectation is made. Whether it's offering mental health benefits, raising hourly wages, or extending paid sick leave - company policies adopted in response to today’s pandemic don’t have to be a short-lived blip of positive externalities. They can be a fundamental shift to a better way of doing business. They can, in essence, be starting steps in the evolution of business back towards the role of community institutions with social responsibility.

For those of us sitting at home wondering what they can do to help their community - whether locally or globally - entrepreneurship has always started with one individual’s dream to make change. Now, more than ever, may be the time to re-contextualize that within the goal of doing good. The role of business in our society has always been a construct of collective social imagination. When our imagination shifts in the face of unprecedented challenges, we open up the path for longstanding definitions to shift alongside it, and create horizons for new and inspiring possibilities.



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