Santo Domingo (Dominican Republic) / Madrid (Spain) - Thursday, July 8, 2021 - The "purpose-driven" or Fourth Sector companies, those that have a potential for systemic change at an environmental, social and economic level, have more and more legal and regulatory figures that support them in Ibero-America, according to an investigation carried out by the Ibero-American General Secretariat (SEGIB), the United Nations Development Program (UNDP) and the International Development Research Center (IDRC) of Canada.
The study "Purpose-driven companies and the regulation of the Fourth Sector in Latin America", the first on this topic, was presented today in Santo Domingo by the Ibero-American Secretary General, Rebeca Grynspan, who is in official visit in the Dominican Republic; UNDP Regional Director for Latin America and the Caribbean, Luis Felipe López-Calva, and the Vice-President of Strategy, Regions and Policy of IDRC, Julie Shouldice.
The research highlights the legal figure of the Benefit and Collective Interest Societies as an innovative instrument in Latin America, and points out that three countries already have approved legislation on the matter (Colombia, Ecuador and Peru) and six are currently discussing bills, with political consensus on the need to advance on the issue.
The study was conducted over a year in nine Ibero-American countries (Argentina, Brazil, Chile, Colombia, Costa Rica, Spain, Mexico, Peru, and Uruguay). It also analyzes cutting-edge legislations outside the region (Canada, the United States, and Europe). Its objective is to propose to the Ibero-American governments a series of public policy measures to promote “B” companies, also known as of circular economy or triple impact companies.
In this sense, the research calls governments of the region to promote sustainable public procurement, giving preference to these types of companies, and to grant tax benefits to those companies that generate a positive social and environmental impact.
“Public policies are key to transform our markets and make major global changes in terms of sustainability and social inclusion, and to generate conditions of equalitarian business leadership for women. It is time to consolidate sustainability as a primary focus of public procurement. Buying from sustainable, women-led businesses, can play a catalytic role in transforming our markets” stated Julie Shouldice from IDRC.
The Ibero-American Secretary General, Rebeca Grynspan, affirmed that Ibero-America can become a global vanguard region in promoting these companies: “Today we see that investors’ appetite and citizen validation are two key elements that are already present in the boom of purpose-driven businesses. It is essential to have the third element in the equation: the support and impulse from public policy. Only in this way can we make these companies the norm and not the exception in Latin America”.
Luis Felipe López Calva, from UNDP, referred to the support that will be offered to the Fourth Sector: “We have been analyzing for more than a year how we can support public administrations in promoting a resilient, fair and sustainable private sector. Our next step will be to work on the development of roadmaps at the national level, making all the knowledge and the human capital of the three institutions, available to the countries”.
The “purpose-driven companies” have more and more prominence in Latin America. They currently represent more than 6% of the regional GDP and employ 10 million workers.