The Transformative Power of Social Enterprises and Nature-Based Solutions

Naimmah Nur Aini

3 minutes read - 20 January, 2025

The Transformative Power of Social Enterprises and Nature-Based Solutions

Naimmah Nur Aini

3 minutes read

20 January, 2025

    The Transformative Power of Social Enterprises and Nature-Based Solutions

    Social enterprises are rapidly emerging as a vital force in the global economy, supporting nearly 200 million jobs and generating approximately $2 trillion in annual revenue. This sector, which comprises about 10 million enterprises worldwide, is not only redefining business success but also prioritizing social and environmental impact alongside economic growth. As we face unprecedented challenges such as climate change and food security, the role of social entrepreneurs focusing on sustainable practices becomes increasingly crucial.

    By 2050, the global population is projected to reach 10 billion, necessitating a staggering 70% increase in food production. However, current agricultural practices are unsustainable and could lead to catastrophic increases in greenhouse gas emissions. This is where Nature-based Solutions (NbS) come into play. NbS leverage natural processes to address multiple societal challenges simultaneously, including climate change, biodiversity loss, and social inequality. Research indicates that implementing NbS could reduce global CO2 emissions by 37% by 2030. Furthermore, these solutions present enormous economic potential, with estimates suggesting they could create $10 trillion in business opportunities and generate approximately 395 million jobs globally.

    Despite the significant potential of NbS, there exists a stark funding gap. While an alarming $5 trillion of corporate flows negatively impact nature each year, only about $35 billion is allocated annually to NbS initiatives. This disparity underscores the urgent need for increased investment in sustainable solutions that can yield long-term benefits for communities and ecosystems alike. According to a report by The Paulson Institute, in collaboration with The Nature Conservancy and the Cornell Atkinson Center for Sustainability, estimates that global spending on biodiversity conservation is currently between $124 billion and $143 billion per year. However, to effectively reverse biodiversity decline by 2030, it is estimated that between $722 billion and $967 billion per year is needed. This results in a significant funding gap of approximately $598 billion to $824 billion annually.

    A compelling example of how social enterprises can effectively implement NbS is Forestwise in Indonesia. This innovative organization partners with 1,200 farmers to produce deforestation-free rainforest products, demonstrating a successful model for sustainable agriculture. By protecting 36,000 hectares of rainforest, Forestwise not only contributes to biodiversity conservation but also significantly increases community incomes by an impressive 180%. This initiative empowers local communities and addresses gender disparities within the agricultural sector, showcasing how social enterprises can create economic opportunities while preserving vital ecosystems.

    Forestwise's innovative approach involves sustainable harvesting of non-timber forest products (NTFPs), such as illipe nuts and kukui nuts. By providing training on sustainable practices and establishing fair trade agreements with local farmers, Forestwise ensures that communities receive at least six times their usual income for each kilo of illipe nuts harvested. This financial incentive not only helps protect the rainforest but also fosters community resilience against economic instability.

    The potential for social enterprises like Forestwise to drive meaningful change is evident through their alignment with the United Nations Sustainable Development Goals (SDGs), particularly in areas such as decent work, climate action, and poverty alleviation. However, despite their critical contributions to society and the economy, social enterprises remain underfunded and often lack legal recognition in many countries. An ILO report highlights a funding gap of approximately $1.13 trillion needed to fully realize the potential of social enterprises globally. Addressing this gap requires robust engagement from the private sector and supportive policies from governments.

    As we look towards a future marked by both challenges and opportunities, it is imperative that more entrepreneurs focus on nature-based solutions. The evidence is clear: investing in social enterprises not only fosters economic growth but also cultivates resilience against climate change and promotes social equity. By harnessing the power of NbS through innovative models like Forestwise, we can pave the way for a sustainable future that benefits both people and the planet.

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