Businesses that transform realities: what are impactful companies?

People change, and so do businesses. There is another way of doing business, one that doesn't consider economic success as its primary indicator of progress, but rather integrates the well-being of people and the planet into its business model.

Latin America is one of the most unequal regions in the world. At the same time, the acceleration of climate change due to human intervention is causing visible damage. Who is responsible? Individuals? Governments? Businesses? Everyone?

The business world as we know it is changing. It's no longer valid to do business as it always has, focused on unbridled growth and cutting costs at all costs to maximize profits. There is another way to do business: with impact.

Impact Enterprises are a business alternative that considers the well-being of people and the planet as a cross-cutting principle in carrying out their activities. Two types of organizations that respond to this principle are Social Enterprises and Triple Impact Enterprises. To understand what these types of organizations are all about, let's analyze the following spectrum:

We generally know two types of organizational models: companies and non-profit organizations.

Traditional companies have a commercial objective; their goal is to maximize profits, and economics is the main indicator of success. To carry out their activities, they sell products and services. This is the case with Despegar, an online travel agency.

On the other hand, non-profit organizations, such as NGOs or foundations, have a social objective—solving or mitigating a social or environmental problem—and they do so through revenue models that depend on subsidies, donations, or partners. This is the case of the CONIN Foundation, which works to combat child malnutrition.

Now, if we move toward the more commercial end and take a step toward the social side, we find that some companies have Corporate Social Responsibility (CSR) or Sustainability areas. This means they seek to integrate metrics or initiatives with social or environmental impact into their business models, but the primary objective remains the same. For example, in the case of the cosmetics brand AVON, they carry out multiple initiatives to combat gender-based violence, training their network of salespeople in first-person listening so they know how to support customers or close friends who are potential victims of violence. They offer free mammograms in different parts of the country where access to healthcare is lacking. They also have a deep commitment to embracing diversity in their communication campaigns so that all people feel represented.

At the other extreme, if we move toward the social and commercial sectors, we find non-profit organizations that develop commercial initiatives with the goal of generating income or financing one of their projects. For example, the NGO Haciendo Camino works to improve the quality of life of children and families in situations of social vulnerability in northern Argentina and sells knitted dolls made by mothers who participate in the NGO's activities, which allows them to generate income to create workshops that train more women.

In the middle are the so-called hybrid organizational models, which combine commercial and social aspects.

Social Enterprises are created with the goal of solving or mitigating social and/or environmental problems, and they do so through a business model. That is, they sell products or services. What distinguishes Social Enterprises is the fact that they reinvest between 50% and 100% of their profits back into the primary focus of their impact. For example, En Buenas Manos is an Argentine Social Enterprise founded to demonstrate that people with disabilities can be perfectly productive. Alarmed by the fact that 80% of people with disabilities do not have jobs that match their capabilities, it created various services for companies, such as catering provided by deaf or hard-of-hearing people, delivery of boxes of fresh fruit provided by people with intellectual disabilities, and massages provided by blind people, among others.

Triple Impact Companies seek to balance economic, social, and environmental impact when carrying out their activities. They sell products and services and focus on reducing negative environmental impact and maximizing social impact. While they have a concrete commitment to generating positive impact, they do not necessarily reinvest their profits in impact initiatives. For example, the food company Zafrán seeks to contribute to healthy eating, with real ingredients and supplies produced primarily by responsible, biodynamic, organic, and agro-ecological farmers. It promotes job inclusion by working with various sheltered workshops and has a job inclusion program for people who have experienced confinement.

Positive Impact Companies are not isolated initiatives of idealistic entrepreneurs; they are a way of doing business that is paving the way for the change we need to make as a society if we want harmony and focus on solving social and environmental problems together.

In this new section, we'll share what it means to do business with impact, with the goal of inspiring and encouraging you to take action, regardless of your role. We invite you to be part of the change and share that there is a different way to do business.

If you'd like to learn more about Social Enterprises, you can do so in our EKHOS Online Course .

If you need advice or would like to talk, please write to jessica@ekhos.org