Social enterprise in the construction industry

A social enterprise is founded to foster wellbeing beyond business walls. These impactful organisations use traditional trade operations to achieve social, cultural and/or environmental goals. And in recent years, there has been a surge in social enterprise in the construction industry.

Our sector offers solid opportunities for social procurement and sustainability-centric innovation. With contractors and suppliers engaging social enterprises throughout the construction process, demolition and development projects can transform local communities and the wider economy.

As a certified social enterprise, Major Projects Group is passionate about educating key stakeholders on its society-wide benefits. Below, we break down the fundamentals of social enterprise, what it involves, its importance and certification process. Read on to learn why this movement is gaining so much traction in Australia’s construction industry.

What is a social enterprise?

A social enterprise is an organisation that trades with the intention to combat societal issues, whether through community support, employment opportunities, and/or eco-conscious practices. Social enterprises operate like any other business, but are driven by a mission to change our world for the better. To be considered a social enterprise, an organisation must:

  • Be motivated by a social cause, be it economic, cultural or environmental;
  • Earn the majority of its revenue from trade, as opposed to grants or donations; and
  • Dedicate at least 50% of its profits towards their social cause of choice.

And what do social enterprises do on a day-to-day basis? As well as in construction, social enterprises exist across all industries, from manufacturing to hospitality. Whatever the trade, there are three main models of social enterprise:

Employment model

Some social enterprises provide employment and training opportunities to marginalised demographics. Whether due to social, physical or legal factors, many individuals find it challenging to secure roles and develop their professional skills. This model seeks to help such people earn a stable income and climb the career ladder so that they can lead a comfortable life.

For example, Community Construction hires and trains team members who have sought asylum and refuge in Australia. As well as offering employment and skills development, this Sydney-based construction company has partnered with NAVITAS to offer its staff free English lessons outside of work hours.

Transformative model

Under the transformative model, a social enterprise produces products and/or delivers services to address community needs that are not yet being fulfilled. The goal is to improve society via the provision of previously-inaccessible resources.

For instance, Greenstream Flooring is a sustainable flooring supplier in the UK who provides low-cost flooring materials to social housing tenants who would otherwise be unable to afford this necessity.

Donation model

In this model, businesses give a portion of their profits or offerings to charities or community-based organisations. A popular method is to donate a product for every purchase a customer makes. Alternatively, the business may contribute a percentage of its revenue to fund a social cause. As a proud social enterprise, Major Projects Group is donating 50% of its distributable profits to charities.

For example, the Major Projects Foundation was established in 2018 to support ocean conservation through research, education and action. Discover more about our mission to protect Australian and Pacific Island waters below.

The rise of social enterprises in Australia

According to Finding Australia’s Social Enterprise Sector (FASES) 2016, there were 20,000 social enterprises in Australia – a number that has been steadily rising in recent years.

Why the increase? It’s all down to growing public demand for corporate responses to social and environmental concerns, coupled with a greater need for Not For Profit organisations to broaden their income streams. As a result, both the public and private sectors have become more invested in social enterprise.

Government support

There are government policies in place to promote the growth of the social enterprise sector. These policies vary by state.

For example, in Victoria, social enterprise is supported to grow, connect and improve under the Social Enterprise Strategy 2021-2025. As well as providing additional funding to this sector, the State Government directs a significant portion of its own purchasing toward social enterprises. Meanwhile, in NSW, some social enterprises are classified as small to medium businesses, Aboriginal businesses and Australian disability enterprises. Therefore, they are eligible for subsidies and exemptions under the:

In Queensland, existing and aspiring social enterprises may benefit under the Queensland Social Enterprise Strategy. More specifically, the Social Enterprise Jobs Fund has dedicated $8 million to empower social enterprises to grow, upskill and offer more employment opportunities. This support is taking place through three tiers:

  • Social enterprise capacity and capability development – the Government has allocated an extra $385,000 to the Queensland Social Enterprise Council (QSEC) to help strengthen awareness of social enterprise suppliers in the private sector and for development activities in regional areas.
  • Social enterprise market development – $660,000 has been committed to assist more social enterprises to provide goods and services to the government.
  • Social enterprise finance – to boost access to finance, training and employment opportunities in the social enterprise sector, $4.6 million in development and growth grants are available to these businesses and their development projects.

On a more local level, councils like Parramatta City Council and Brisbane City Council are supporting social enterprise via capacity building activities and purchasing arrangements.

Social procurement

There has also been mounting interest in social enterprise amongst private businesses and supply chain networks. This is where social procurement comes into play.

Social procurement occurs when an organisation’s spending is used in a manner that supports social causes. This concrete business strategy encourages value-for-money considerations that look beyond price. As a result, it provides opportunities to make a social and/or environmental impact for the overall community’s benefit.

With no extra funding required, social procurement has gained momentum throughout Australia as a way to create social value within existing budgets. In other words, it’s a win win.

Why social enterprise is important

Social enterprise is so important because its unique approach benefits the entire community in several ways.

Firstly, social enterprises play a key role in supporting an inclusive and thriving economy. In Australia, these businesses provide over 200,000 job opportunities (that’s 1 in every 60 employees), generate income, reinvest profits and foster a whole network of stakeholders, from suppliers and transport providers to lenders and legal teams.

Together, these advantages make a significant contribution to the country’s economic success. It is estimated that social enterprises generate $21.3B to the Australian economy each year, accounting for as much as 1% of GDP.

But the value of social enterprise goes far beyond financial effects. Social enterprises are driven to make a positive social impact as the trade, taking considered action to improve the social, physical and/or cultural environment.

A key catalyst for constructive change, their practices can inspire the masses to follow suit. Whether proponents of sustainability, safety, social equality or otherwise, these businesses are helping to shape a brighter future for all of us.

How to become a social enterprise in the construction industry

To ensure positive change through trade, any business wishing to become a social enterprise must obtain official certification first. Social Traders is the only provider of social enterprise certification in Australia. This certification verifies that a social enterprise makes a positive impact via trade by:

  • Having a clear primary cultural, social, or environmental mission in line with a public or community interest;
  • Gaining a considerable portion of revenue through commercial operations; and
  • Investing resources into their mission to the extent that public or community benefit exceeds private benefit.

The certification process itself is supportive and flexible, with tailored guidance assisting any type of business in any stage of development. Together with Social Traders, your construction business will learn how to define its social impact model, as well as manage associated activities and costs. Plus, this invaluable support doesn’t stop with certification. As a social enterprise procurement specialist, Social Traders also connects certified social enterprises in Australia with all sorts of commercial and government buyers.

How to find certified social enterprises for your next project

The easiest way to find a certified social enterprise for your upcoming construction project is to explore the Social Trader’s public directory. This online resource features a list of all verified social enterprises in Australia, providing you with plenty of options to choose from.

There are also state-specific directories available. For example, if your business and construction works are based in NSW, simply request access to this portal by emailing [email protected]. Alternatively, search the QSEC directory to discover social enterprises in Queensland. In Victoria, you can explore the Victorian Social Enterprise Network (SENVIC) directory.

Partner with proud sponsors of the Major Projects Foundation

With an extensive scope of spend and strong links to the public sector, the construction industry is well-positioned to bolster social enterprise. Providing the literal building blocks of our communities, it is our duty to ensure each project engages its surrounding people and resources as sustainably and effectively as possible.

As a leading construction social enterprise, Major Projects Group’s core purpose is to work towards a thriving environment via considered business practices.

One such example of our efforts is the establishment of the Major Projects Foundation (MPF). The MPF is a marine research and conservation not-for-profit organisation that delivers engineering solutions to safeguard the ecosystems within the Pacific Ocean. Target issues include the risk of oil spills from shipwrecks, plastic pollution, explosive remnants of war, ghost nets, and the consequences of climate change.

Additionally, the foundation provides public education about the environmental threats to our region, and capacity building within its communities.

As well as providing the seed funding, expertise and logistics to get this organisation off the ground, we continue to donate some of our distributable profits to its critical mission. Discover some of the key projects we worked on in 2022 below:

Federated States of Micronesia (FSM) WWII Shipwreck Pollution Mitigation Project

Chuuk Lagoon in the Federated States of Micronesia (FSM) has the most potentially-polluting ship wrecks in the entire Pacific Ocean, with 19 holding toxic fuel oil and unexploded ordnance that pose considerable environmental risks.

These dangers could also cause significant harm to the region’s 50,000 residents. The sheer amount of WWII wrecks at Chuuk Lagoon make it one of the top dive sites in the world, and the locals’ greatest foreign income stream. An oil spill or explosion could put a stop to this tourism, not to mention the vital fishing economy.

To tackle such risks, MPF partnered with the Australian Government Department of Foreign Affairs and Trade, FSM Government, Chuuk Government and Secretariat of the Pacific Regional Environment Programme (SPREP). In November, we had our first fieldwork for this project to define the current condition of the wrecks, as well as locate and measure the oil.

As our Research Director, Dr. Matt Carter, puts it: ‘‘helping to make a difference in the lives of residents of FSM is at the core of what we do.’’ Matt has since been recognised for his work with MPF in the Explorers Club 50, a renowned list of people who are changing the world.

Archaeological survey of the Japanese Submarine I-124

MPF is proud to have completed the first archaeological survey of the Japanese submarine I-124 that sank off Darwin during a WWII battle. It is now protected under the Underwater Cultural Heritage Act.

On the latest expedition since the Australian Navy’s in 1984, our divers descended over 50 metres to reach the wreck, inform scientific research and support site management.

With expert eyes on the submarine, we have been able to shed light on what happened on that fateful day over 80 years ago, as well as the current condition of the wreck.

The wider team also consisted of archaeologists, a cultural liaison officer from the Australia-Japan Association of the Northern Territory and a film crew. Stay tuned to watch the short documentary on our expedition, which is set to be released on 24 March 2023.

Initiated and managed by Dr. David Doov Steinberg, Heritage Branch of the Northern Territory, this project was jointly funded by the Commonwealth Government’s Underwater Cultural Heritage Program and Northern Territory Government.

To learn more about our environmental protection efforts, enquire today on +61(0)2-4967-7900 or [email protected]. Whether you are a government body, a mining corporation or a property developer, it’s always a good idea to action your demolition with a certified social enterprise.