Social enterprises have not only made advances in the Ibero-American economy, but they are also showing a development similar to that of other parts of the world, according to the first report on the Fourth Sector published by the Ibero-American General Secretariat (SEGIB) jointly with IE University that has been launched today in Madrid.
According to this study, undertaken in seven countries (Argentina, Brazil, Colombia, Chile, Mexico, Portugal and Spain), which represent over 87% of the regional gross domestic product (GDP), there are up to 170,000 social enterprises set up in Ibero-America that employ almost 10 million workers per year.
In other words, these enterprises account for more than 6% of the Ibero-American GDP, a proportion close to the 8% of the European Union, Canada and Australia, says the report “Business with purpose and the rise of the Fourth Sector in Ibero-America”.
The rise of social enterprises coincides with a period of increasing concern about social and environmental issues among Ibero-American citizens.
A survey undertaken by SEGIB among 11 countries in the region (Argentina, Brazil, Colombia, Costa Rica, Chile, Ecuador, Spain, Mexico, Panama, Peru and Portugal) shows that Ibero-American citizens are almost as concerned about climate change as about inequality (68% and 75%, respectively).
Social enterprises share the purpose of not only seeking financial profit but also delivering social and environmental benefits. They are part of the so-called Fourth Sector, which combines the best of the three traditional sectors (private, public and non-profit) as a way to solve some of the most pressing challenges of the 21st century, such as poverty, inequality and climate change.
These companies are of paramount importance to achieve the Sustainable Development Goals included in the 2030 Agenda of the United Nations.
The report on the Fourth Sector highlights that governments in the region are increasingly aware of the need to support social enterprises: “Laws and legal frameworks have been adopted or are intended to be adopted in eleven countries with the purpose of categorizing and supporting these companies”.
However, the report also points out that the development of these enterprises is constrained by a lack of an appropriate ecosystem, and it presents a series of recommendations for each of these countries.
The results of SEGIB survey are along the same lines: over 85% of the 3,550 Ibero-American survey respondents believe that enterprises with a positive environmental impact should receive more support from governments (such as grants, tax exemptions and access to public contracts).
Also, 91% of respondents believe that, if the private sector does not change their business model, the next generations will live worse than their parents, and 50% is of the opinion that the primary purpose of companies should be to improve the lives of their employees and clients.
“Citizens are telling us that sustainable growth, inequality and climate change are not just the concern of governments. These challenges also call for companies to play a more active role”, says the Ibero-American Secretary-General, Rebeca Grynspan.
In November 2018, during the 26th Ibero-American Summit of Heads of State and Government held in La Antigua (Guatemala), SEGIB was mandated to drive and strengthen the ecosystem of the Fourth Sector in the region.
The report and survey about the situation and views on social enterprises in Ibero-America are the first step on this path.
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