Social and Environmental Responsibility in Small and Medium Enterprises in Latin America

Corporate social responsibility in small and medium enterprises

SMALL AND MEDIUM ENTERPRISES (SMEs) MAKE UP MORE THAN 90% OF businesses worldwide and account for between 50% and 60% of employment. In Latin America, 95% of firms are SMEs, and account for between 40% and 60% of jobs, depending

on the country, and contribute 30-50% of GDP. In the European Union, it is estimated that, as of 2003, more than 20 million SMEs (with up to 250 employees) accounted for over 80 million jobs. In the United States (where small firms are defined as those having fewer than 500 employees), 99.7% of all firms fall into the 'small business' category, account for half the nation's jobs and contribute more than 50% of non-farm GDP.

Because these firms tend to be more labour-intensive than large enterprises, they have a significant impact on employment and, as a result, their corporate social responsibility (CSR) practices have a significant impact on society as whole, even if their contribution to the overall production of goods and services is not as large. In addition, they tend to contribute more to the equitable distribution of income and, because they provide employment and income to the less well-off, they help to provide social cohesion and stability. Together, these reasons make promoting socially responsible SMEs a topic of rising importance.