Social enterprises: catalysts for sustainable development

From the beginning of the pandemic, the Secretary General of the United Nations anticipated that the recovery from the COVID-19 crisis would have to encourage us to build a different economy, with more equitable, inclusive and sustainable societies. This call already had some precedents, the most striking being the one made by the Financial Times in September 2019. Through the “Capitalism. Time for a reset”, the British newspaper proposed a reformulation of capitalism, one in which business does not focus solely on the interest of shareholders, but generates profit with purpose and taking into account the social context.

Years ago, Professor Muhammad Yunus (Nobel Peace Prize winner) anticipated that in order to reduce poverty in the world we would have to redefine concepts and redesign institutions. It was thus that he proposed the figure of social businesses and, over time, similar concepts were created such as hybrid companies, companies with a purpose, companies for the benefit and collective interest, fourth sector, among others. In the end, all these types can be grouped under the term social enterprises, understood as those that do not focus on maximizing profits but on solving the problems that most afflict humanity through innovative and self-sustaining business models. In other words: social enterprises do not focus their attention on capital but on the human being.

Problems such as poverty, social inequality, food insecurity, climate change and the lack of adequate housing or drinking water, require innovative responses to avoid putting future generations at risk. This need has become more evident seven years after the adoption of the 2030 Agenda for Sustainable Development, since the efforts made so far have not been sufficient. In the United Nations Report 2022 on this subject, it was recognized that we are facing a “particularly worrying panorama” and that the Agenda for Sustainable Development is “in grave danger”. In this context, social enterprises have been seen as an important part of the solution.

In Mexico there are some companies such as Iluméxico, which designs and integrates solar equipment to provide electricity to families living in remote places; Pixza, a pizzeria that, in addition to offering pizzas made with blue corn and Mexican ingredients, offers formal employment to young people in situations of abandonment to achieve their social reintegration; Isla Urbana, a company that designs and installs rainwater harvesting systems to bring water to communities that do not have a connection to the drinking water network; and Promesa, which implements environmental solutions in schools, housing units and other types of organizations, to promote environmental responsibility through responsible waste management actions.

These types of companies are revolutionizing conventional thinking and have become true catalysts for sustainable development by generating more and better jobs, mobilizing capital, promoting inclusive development, conserving natural resources, among other actions. Its potential is such that the Organization for Economic Cooperation and Development (OECD) published last April a Practical Guide aimed at public policy makers, offering them guidance on the design of legal frameworks that favor the development of this type of company; and two months later it issued a recommendation for the adherent countries to recognize and promote this legal figure.

Due to its importance, it is imperative that in the legislative field the need and relevance of creating a special legal framework for social enterprises be discussed in order to identify them, make them visible and encourage their development and expansion, taking into account that one of the reasons why What makes social enterprises scarce is the lack of institutional frameworks and public policy strategies that proactively encourage their flourishing.