Private Enterprise and Financial Markets > Micro, Small and Medium Enterprise
Social and Environmental Responsibility in Small and Medium Enterprises in Latin America
By Antonio Vives (09/05, PEF-105, En)
Responsible practices by private firms have been under careful scrutiny in the last few years, mostly as a result of a few very visible cases of corporate misgovernance. Unease with the narrower issue of corporate governance has reinforced the concerns of governments and (especially) civil society regarding the relationship between firms, society and the environment in which they operate. These concerns have arisen in the context of increasing globalization resulting pressures to remain competitive. In the opinion of many, this has led to heightened risks of misbehavior by private firms.
At the same time, concern about the prevalence poverty and underdevelopment in many countries has highlighted the importance of engaging the private sector in assisting governments to solve these problems, in particular, the achievement of the Millennium Development Goals. All these factors have led to a resurgence of the concerns with the issue of corporate social responsibility (CSR), which in its broader view, refers to the actions that firms take to carry out their activities in a responsible manner, respecting the environment, the community and the workforce, and also creating opportunities to enhance them.
Most of the concerns have been directed at large firms, presumably because they are the most visible and have the highest impact. The literature has tended to ignore small and medium enterprises (SMEs). However, as this paper points out, SMEs represent over 95 percent of all firms in Latin America, provide between 40 and 60 percent of all jobs, and account for 30 to 50 percent of GDP. As a result, responsible behavior by these firms can also have a significant impact on society and the environment.
The study summarized in this paper sought to determine the extent to which SMEs behave responsibly and, based on the results, propose measures to enhance responsible behavior. The study is quite comprehensive, covering eight countries in Latin America and over 1,300 firms. We hope that it will contribute to further the development of research and policies to foster the responsible behavior of SMEs and, in turn, enhance their contribution to economic development.
Last updated: 06/13/07
