Almost ten years after the publication of The Aspen Institute report “The Emerging Fourth Sector,” numerous business initiatives have been designed and developed to consolidate a new economic sector. A sector that more than economic prosperity and financial benefit – seeks positive impacts on the social and environmental space in which it develops. These companies are known as ” For Benefit Companies. ”
Companies in the Fourth Sector are companies whose primary “raison d’être” is their social, economic, and environmental impact, and not only the pursuit profit. The Fourth Sector extends beyond these companies to include public organizations, governments, and NGOs, seeking financially viable management alternatives that allow them not to be chronically dependent on subsidies and state aid. Likewise, numerous demand segments are much more aware of the positive and negative impacts that their consumption pattern produces in the social and environmental spheres. These consumers drive new growing trends that invite us to rethink the traditional way of doing business, moving towards new, more consistent organizational models and responsible.
It is not sufficient for companies to publish their Corporate Social Responsibility reports, as this does not automatically classify them as companies in the Fourth Sector. “Benefit Companies” are a challenge for governments of Western societies: How to evaluate an organization that belongs to this sector? The goals and the social and environmental purpose of the company become its reason for being. Therefore, the positive social, environmental, and economic contributions are an intrinsic part of the business, in addition to being prosperous and economically self-sufficient.
The traditional sectors are the first sector or public sector; the second sector or private sector; the third sector or NGOs. Organizations that implement strategic management models, consider the transition towards a sustainable, inclusive, profitable and efficient economic model, and all those organizations sensitive and committed to their economic, social and environmental environment, are organizations that will help the growth of this Fourth Economic Sector. This sector actively contributes to the achievement of the 2030 Agenda and the United Nations Sustainable Development Goals.
In Latin America, the concept of the Fourth Sector has been developing in recent years, in many cases, motivated by donor investments and NGO projects seeking sustainable market mechanisms. This development has not yet been systematized. The political, legal, and financial conditions to actively promote the growth of this new sector, essential to contributing to achieving the commitments made with the 2030 Agenda and the SDGs, have not been put in place.
Planet4People is committed to supporting organizations from traditional economic sectors in their transition towards a social and sustainable New Economy, framed within the Fourth Sector.