The report "Business with Purpose and the Rise of the Fourth Sector", produced by the Center for the Governance of Change in close collaboration with the Ibero-American General Secretariat, analyzes the current state of purpose-driven enterprises in 7 countries of Ibero-America, which together account for 87 % of the total GDP of the region: Argentina, Brazil, Colombia, Chile, Mexico, Portugal and Spain.
Ibero-America is witnessing the rise of a new generation of enterprises driven by purpose beyond profit. These entities come in a wide variety of forms (from cooperatives to B-corps) and fall within numerous movements (social entrepreneurship, circular economy, human-centered business, fair trade, banking with values, and many others) but all of them share the same goal: to use a market-driven approach to become self-sustaining and deliver a positive social and environmental impact at scale.
The business models and principles of these purpose-driven enterprises make of them one of the most powerful allies that governments, NGOs and societies have to achieve the 17 Sustainable Development Goals by 2030.
The data collected suggests that there are more than 170,000 purpose-driven enterprises in Ibero-America, which account for over 6 % of its total economy and employ almost 10 million workers annually.
There are significant divergences between countries, mainly dictated by the different weight of cooperatives, which still represent the bulk of the fourth sector. Nevertheless, in all territories we find a significant rise of new organizational forms and enterprises aimed at tackling problems such as poverty, inequality and climate change.
Governments are increasingly aware of the need to support purpose-driven enterprises. 11 countries in the region have adopted or are currently discussing new regulations aimed at typifying and supporting alternative forms of organizations that integrate commercial activities with public benefit pursuits, usually under the framework of “social economy” and “BIC enterprises”.
However, despite these promising figures, for-benefit enterprises and their ecosystem are still in the early stages of development. Getting the Fourth Sector formally and properly established will be a long-term, multi-stakeholder endeavour that will require a number of steps — from creating new regulatory frameworks, to standardizing metrics and assessment methods to measuring social and environmental impact in empirical, efficient ways.
This report advances a vision for the development of the Fourth Sector, as well as a number of specific recommendations on how governments and companies can foster an environment that allows for growth and scale.
For more information and detailed data, please download the full report below.
World Economic Forum
United Nations Development Program
IE Business School
Universidad Católica de Chile
Pontificia Universidad Católica de Chile
Universidad de La Salle
Universidad de La Sabana
Tecnologico de Monterrey
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