As a female entrepreneur leading a social good startup focused on growing the global marketplace for sustainable products and services through data and insights, I’ve been amazed at how many women I’ve met who are now engaged in leading values-based companies focused on one or more facets of sustainability. And by incorporating an emergent social impact business model, they are not using traditional non-profit structures to do so, but are instead integrating these values in for-profit companies that leverage capitalism for good, which I fully embrace.

Let’s look at the overall landscape for women-owned businesses. According to the National Association of Women Business Owners, in the United States1:

• More than 9.1 million firms are owned by women, employing nearly 7.9 million people, and generating $1.4 trillion in sales as of 2014
• Women-owned firms (50% or more) account for 30% of all privately held firms and contribute 14% of employment and 11% of revenues

Interestingly, they further report, “the only bright spot in recent years with respect to privately held company job growth has been among women-owned firms. They have added an estimated 274,000 jobs since 2007. Among men-owned and equally owned firms, employment has declined over the past seven years.”

Additionally, if we look at the concentration of women-owned firms by industry sector, Health Care & Social Assistance ranks highest at nearly 53% of concentration within the industry, followed by Educational Services at 45%. When we recently analyzed the US-based SMEs in our HealRWorld Global Sustainability Database™ against the data of our partners, Dun & Bradstreet, the leader in global business credit data and insights, we found that there were over 30% more sustainable women-owned businesses than there were general women-owned businesses in D&B’s database … which substantiates the growing interest in sustainability by women-led businesses.

From a global perspective, according to the World Bank Group, “in developing countries female entrepreneurship is also increasing, as there are approximately 8-10 million small and medium enterprises (SMEs) with at least one female owner. Worldwide, at least 30% of women in the non-agricultural labor force are self-employed in the informal sector; in Africa, this figure is 63%. Women-owned businesses tend to be informal, home-based and concentrated in the areas of small-scale entrepreneurship and traditional sectors, which primarily includes retail and service.”2

Given these performance metrics, it’s unfathomable that women-led SMEs continue to struggle to raise the capital they need to be successful and productive assets to the global economy. According to the July Majority Report of the U.S. Senate Committee on Small Business and Entrepreneurship, “only 4% of the total value of all small business loans goes to women entrepreneurs.”3In addition, the recent Babson College study on venture capital funding for women entrepreneurs indicates that “85% of all venture capital–funded businesses have no women on the executive team. Importantly, only 2.7% of venture capital-funded companies had a woman CEO.”4

Globally, a lack of finance is a major constraint to the growth of women-led businesses in general . . . and at HealRWorld, we hope to change that dynamic for female-run and other sustainable businesses.

Findings from our recent study that leveraged D&B’s proprietary Viability Rating™ revealed that US-based SMEs who are certified or otherwise committed to some aspect of sustainability in the HRW Global SME Sustainability Database™ are less risky when compared to the US active business population in D&B’s database.

These findings should have profound market implications increasing the flow of capital and other resources to sustainable SMEs who are not only helping our planet, but are sound business prospects — including women-owned sustainable companies.

There are also positive benefits to both SMEs and the large corporates who can identify sustainable SMEs in their supply chains, not only from a regulatory and governance perspective, but also through what translates into ‘good will’ known as values-based sourcing. Values- based sourcing is the concept that large corporates who source from sustainable SMEs in their supply chain have greater intrinsic value and can greatly reduce the ‘reputational risk’ associated with “perilous” suppliers downstream who could conceivably cause great damage to the organization. When identified, these SMEs should be supported directly by the larger corporation whose best interests would be served by helping these SMEs to succeed.

Hopefully, both of these dynamics will help initiate a greater influx of capital and resources to sustainable SMEs globally, particularly women-owned entities that continue to struggle with access to capital. Just imagine what could be accomplished in terms of new jobs, productivity, and sustainable business if that barrier were removed

 
Michele A. Bongiovanni is CEO, HealRWorld LLC, a social impact firm whose big data platform aggregates sustainability information (People, Planet, Profit) on global large and small & mid-sized enterprises (SMEs) to power products, drive revenues & foster positive change. For more than 20 years Michele has served in strategy, marketing and product innovation in the financial services industry.

 

http://www.nawbo.org/section_103.cfm

2 http://www.ifc.org/wps/wcm/connect/a4774a004a3f66539f0f9f8969adcc27/G20_Women_Report.pdf?MOD=AJPERES

3 http://www.microbiz.org/wp-content/uploads/2014/07/21st-Century-Barriers-to-Womens-Entrepreneurship.pdf

4 http://www.babson.edu/Academics/centers/blank-center/global-research/diana/Documents/diana-project-executive-summary-2014.pdf