Embark on a journey with us as we unveil the transformative impact of FUNDES Latin America! Committed to strengthening the entrepreneurial capacities of MSMEs in the Latin American region. With a focus on promoting economic, social, and environmental development, FUNDES Latin America plays a vital role in shaping the business landscape. 

To provide more insights into their work, we’ve partnered with María Fernanda Goñi, Marketing Manager for FUNDES, who has prepared the following blog.

The potential of micro, small, and medium-sized enterprises for sustainable business models

FUNDES has worked with micro, small, and medium-sized enterprises (MSMEs) for nearly four decades. This sector has great potential to lead the shift to sustainability in Latin America. This sector accounts for 95% of the business fabric in the region, creates 50% of jobs, and contributes to 20% of each country’s GDP.

We have included in our impact objectives the implementation of actions in collaboration with partners to strengthen the role of MSMEs in environmental protection and sustainable development. MSMEs can become agents of change and play a critical role in the region’s transition to more sustainable business models.

Contributing to sustainable processes and reducing environmental damage is no longer the exclusive responsibility of large companies. MSMEs and entrepreneurs are increasingly developing strategies to run their businesses sustainably. Therefore, the impact ecosystem must join efforts to promote sustainable growth and produce business models that are integrated into value-creation ecosystems and enable the achievement of sustainable development goals.

Today, 60% of companies report on these indicators, showing a clear transition to more sustainable business models. As a result, sustainability is becoming a key element in the strategic planning of companies that seek to integrate it in a transversal and operational way in all their work areas.

To achieve this goal, our business unit dealing with strategic consulting, research, and project implementation has developed a strategy based on three approaches:

1. Value Chains: We work in different links of value chains at a cross-sectoral level that integrates MSMEs.
2. Communities: We generate positive impact in communities by promoting job creation, economic empowerment, equity, and equality through MSMEs.
3. Environment and sustainability: We promote innovative solutions involving MSMEs that balance economic growth with social and environmental responsibility.

With a third approach that recognizes that MSMEs play a critical role in environmental protection and sustainable development, we commit to working with them to strengthen their role as agents of change.

From paper to action:

In 2022, in collaboration with PepsiCo – Reciclando en Comunidad – we launched a program born from the need to create favorable conditions for the owners of mom & pop shops, “bodegas” in Peru, to implement successful and sustainable recycling of PET material and its direct impact on the sustainability of the planet. Through training and personalized advice on recycling issues, participating entrepreneurs become agents of change and raise awareness in the community about the importance of recycling.

This project directly contributed to achieving Goal 12, responsible production and consumption, and Goal 13, climate action. After a 6-month intervention, we completed the project with 79 trained stores, 40 of which became collection points, and signed 6 agreements with local governments in Peru to promote recycling.

Bodega Rojita was one of the stores that participated in our program. For 20 years, this store has provided the community of Santa Anita with essential food products and served as a meeting place for the neighborhood. Unfortunately, at the time of participation in the Bodega Rojitas program, Rosita did not have adequate waste management. However, she could implement the necessary practices for effective waste management thanks to their engagement in the workshops.

This intervention demonstrates the systemic changes that can occur in the business ecosystem when different actors in that ecosystem join forces and the ability of MSMEs to implement successful and sustainable recycling projects.

Challenges:

Although the business ecosystem has made significant progress in implementing environmental initiatives, much remains to be done. One of the key lessons learned from our interventions under Approach 3 – Environment and Sustainability – is the importance of setting clear priorities. As many tasks must be completed to achieve sustainable processes and a positive environmental impact, prioritization allows us to focus our efforts on long-term and sustainable measures.

Sustainability is a concept that includes social and environmental elements. Therefore, it must be internalized in the micro, small, and medium enterprises’ culture, becoming a cross-cutting element of all activities.

To achieve real change, the actors involved in such initiatives must understand the environment in which MSMEs operate. This means proposing and implementing methods contributing to the transformation and promoting sustainability as risk mitigation and business development tools. If we can progress in these areas, we will move closer to achieving our Sustainable Development Goals and building a more prosperous and equitable future for all.

Become an MSME ally:  Do you want to be part of the change and contribute to sustainable development? Contact us now and learn how to work together to make it happen! We invite you to visit our website and download the 2022 Annual Impact Report and a summary of the first year of FUNDES Catalyst, our startup study, to learn all the details of our triple impact proposal.