MADRID – Social enterprises are playing a bigger role in Ibero-America, with 170,000 companies of this type now operating in seven countries throughout the region, the Madrid-based Ibero-American General Secretariat and Spain’s IE University say in a report presented on Wednesday.

“Companies with Purpose and the Rise of the Fourth Sector in Ibero-America” looks at the cases of Argentina, Brazil, Colombia, Chile, Mexico, Portugal and Spain, which account for 87 percent of the gross domestic product (GDP) of a region spanning 20 countries of the Americas and two in Europe.

The fourth sector encompasses social enterprises that not only seek economic benefit but also look to have a positive impact on society. Their activities include the fight against climate change, as well as efforts to promote the social and labor inclusion of people with disabilities and reduction of the gender gap.

The 170,000 registered social enterprises – the vast majority of which continue to be traditional cooperatives – provide employment to 10 million people and represent 6 percent of Ibero-America’s GDP, the report says.

“We want to promote a more inclusive and sustainable economy within the framework of the Sustainable Development Goals (SDGs),” Ibero-American Secretary-General Rebeca Grynspan said, adding that the region is working to create a regulatory framework conducive to these types of companies.

These enterprises operate differently in a marketplace in which it is not easy for them to find their fit, the Costa Rican economist explained.

“We’re trying to create a different framework for companies so they can contribute to the fulfillment of the SDGs and support existing (traditional) companies in making a transformation” in that sense, Grynspan said.

She also recalled that at the 2018 Ibero-American Summit, held in La Antigua, Guatemala, there was a mandate for creating public policies and a legal framework that foster a more viable ecosystem for these types of enterprises.

In addition, Grynspan noted that consumers are insisting that companies become more environmentally responsible, adding that businesses that refuse to adapt could jeopardize their future sustainability.

Along these same lines, the coordinator of the study, Diego Rubio, said there are an increasing number of actors in the marketplace who believe the private sector needs to change.

He also stressed the need for a favorable ecosystem for fourth-sector companies, noting that many of them cease operating after 12 months.

Despite the difficulties, Rubio pointed to successful fourth-sector companies in the region like Spain’s La Fageda dairy business, which produces environmentally friendly yogurt with a staff consisting mostly of people with varying degrees of mental disability.