Social enterprises are key to climate action

Kiva's CEO Vishal Ghotge argues that we need to support organizations that are driving climate solutions in their communities, in this article originally published on Fast Company.

Each year, the climate crisis intensifies, threatening billions of livelihoods. Yet, amid this growing emergency, social, or impact enterprises—businesses prioritizing purpose and profit—are emerging as unsung heroes. They are driving innovative solutions that could turn the tide. So why are they struggling to secure the impact-focused funding they desperately need?

Social enterprises are not only creating solutions to mitigate the effects of climate change but are doing so in ways that directly support the people most impacted, such as smallholder farmers , low-income families, and rural communities. However, despite their potential to drive significant change, the World Economic Forum estimates that social enterprises face a mammoth $1.1 trillion funding gap, even though their innovative solutions reach millions.

This raises an important question—if social enterprises are at the forefront of climate solutions, why isn’t the funding following suit?

The potential for social enterprises to drive climate solutions is immense. Yet, like so many others, they face a daunting barrier: a complex path to traditional funding options. This is not an isolated issue—it’s a pervasive problem that threatens to stifle the very innovations we need to combat climate change.

Address climate change and create positive social impact

By transforming traditional crafts into modern, eco-friendly apparel and accessories created by artisans in seven of Mexico’s poorest states, Someone Somewhere, a social enterprise based in Mexico, not only reduces waste but provides sustainable income opportunities and services for marginalized communities.

Someone Somewhere works to break cycles of poverty by nurturing artisan development, preserving traditional crafts, and creating products that make a positive impact. The enterprise seamlessly integrates its climate action efforts with a commitment to enhancing its communities’ economic, social, and cultural well-being.

The enterprise has produced 10 million climate-neutral products for organizations like Delta Air Lines, Apple, and Adidas, and has supported the livelihoods of more than 3,000 artisans and their families. Despite its innovative and sustainable model, and its 36 times growth in three years, Someone Somewhere faced hurdles accessing the capital required to expand its operations.

“As a social business, getting a loan from a regular bank can be tough—or impossible. Even if you get it, the interest rates are huge,” said Antonio Nuño, cofounder and CEO of Someone Somewhere. “Having access to low- or no-interest loans is a game changer for companies like us, as it transforms social impact into a competitive advantage against companies without impact. With that, you can access better opportunities and create more fair jobs for the people you want to serve.”

“Having access to low- or no-interest loans is a game changer for companies like us, as it transforms social impact into a competitive advantage against companies without impact. With that, you can access better opportunities and create more fair jobs for the people you want to serve.” - Antonio Nuño , cofounder and CEO of Someone Somewhere

Recognizing this funding gap, Someone Somewhere turned to a nontraditional option to raise its capital—crowdfunding. The social enterprise has continued to prove the viability of its model by successfully raising a $100,000 USD loan, crowdfunded by 2,874 people on Kiva.org. This funding is being directed toward building a new plant, crucial for enhancing quality control and supply chain efficiency—directly supporting its growth and ability to uplift more artisans and further address climate change.

Address the funding gap with modern solutions

Kuli Kuli Foods is a woman-founded social enterprise creating a global market for moringa, a drought-resistant tree known for its nutritional benefits, using regenerative agriculture practices. Kuli Kuli’s ability to expand its reach was initially constrained by the lack of traditional funding options, as investors often shy away from social enterprises, viewing the combined focus on social and financial returns as too risky.

Kuli Kuli used crowdfunding to address its capital needs, raising $10,000 in 2015 through Kiva.org, one of its first sources of capital. After the success of that loan, Kuli Kuli was ready to scale and worked with Kiva Social Enterprises to raise a $100,000 loan in 2020. The loan, crowdfunded by 2,849 individuals and several organizations, enabled the sequestration of 300 million to 900 million kilograms of CO2 per year and supported farmers in Uganda, Ghana, Mozambique, Mexico, and India.

“Sourcing from small farmers requires a tremendous amount of capital, and a higher risk tolerance than most lenders are willing to provide. I honestly do not think Kuli Kuli would have been able to scale to where we are now—selling superfoods in 11,000 stores, planting millions of trees, and supporting over 3,000 small farmer livelihoods—without Kiva,” said Lisa Curtis, Kuli Kuli’s founder and CEO.

“Sourcing from small farmers requires a tremendous amount of capital, and a higher risk tolerance than most lenders are willing to provide. I honestly do not think Kuli Kuli would have been able to scale to where we are now—selling superfoods in 11,000 stores, planting millions of trees, and supporting over 3,000 small farmer livelihoods—without Kiva.” - Lisa Curtis , Kuli Kuli’s founder and CEO.

Kuli Kuli has since posted two additional social enterprise loans on Kiva.org, totaling $650,000, supported by thousands of individuals globally who see the value in supporting these innovative climate solutions, even when traditional investors may not.

Turn a problem into a climate finance opportunity

Nontraditional funding options can lead the way to more robust, traditional capital. Take, for example, ATEC, a social enterprise making strides across Asia and Africa. ATEC developed highly efficient, internet of things (IoT) technology electric induction stoves that eliminate harmful kitchen emissions and significantly reduce energy costs for families.

Transitioning the 4 billion people who still cook with wood to modern, decarbonized cooking methods could reduce global emissions by 1 gigaton—surpassing the emissions produced by the entire global airline industry. ATEC’s estimate is decarbonizing cooking in the Global South is currently worth $20 billion per year and could rise to $50 billion per year by 2030. With the right technology, this climate financing can be put directly into the hands of women in the Global South on the front line of climate change.

Since 2021, ATEC has relied on crowdfunded loans to both finance cookstoves for individuals and support the social enterprise’s expansion into new territories. The success of this approach led ATEC to recently close a $3.75 million Series A funding, proving that nontraditional approaches to financing are providing a critical bridge to larger-scale funding options .

“Our work with Kiva was vital in proving out our climate-driven business model for households in the Global South. It was able to show to our carbon partners like Engie, My Climate, and Fair Climate Fund that users could receive the product and generate 100% data-verified carbon offsets,” said Ben Jeffreys , CEO of ATEC Global . “Now this is done, ATEC has a project pipeline with carbon partners of 3.2 million tons over the next decade that will attract over $25 million in climate financing.”

This pipeline of crowdfunding-to-traditional finance has been a lifeline for many social enterprises. Kuli Kuli successfully raised $10.6 million in Series A and B rounds after its Kiva-fueled loans, backed by an array of impact investors, and Someone Somewhere has raised $2.5 million through Series A, B, and C equity investors. Its success further emphasizes the importance of financial inclusion for both small- and large-scale organizations.

The future of climate solutions

The work of these organizations underscores the critical role that social enterprises play in addressing the intersectional impacts of climate change. These enterprises are developing solutions that not only mitigate the effects of a changing climate but also help communities adapt .

As the world intensifies its efforts to combat climate change , social enterprises are emerging as key players driving innovative solutions. Yet, for these mission-driven ventures to scale, they need more than just support—they need funding that aligns with their purpose: patient, flexible, and affordable capital that prioritizes impact alongside profit. Kiva is one path to securing capital, but it can’t be the only one.

“The climate projects ATEC is developing with global corporate and government buyers are ready to scale,” says Jeffreys, “but it requires patient capital that the inherent risks of Global South climate finance are thoroughly outweighed by returns for their investment, communities, and the planet.”

It’s time for investors to rethink how they fund climate solutions , following the lead of the hundreds of thousands of individuals backing the crowdfunded loans. The stakes are simply too high to maintain the status quo.

What do you think will unlock funding for social enterprises addressing climate change? Let us know in the comments.