In a scenario of constant transformation of socio-environmental impact businesses, entrepreneurship in Brazil has gained strength over the years. And the impact generated by these companies has expanded beyond the Southeast region. Therefore, an unprecedented survey, recently released by CNN Brasil, shed light on the profile and performance of socio-environmental impact companies in the country. Therefore, we will explore the results of this study in detail and analyze how these companies are shaping the Brazilian business landscape.

The Study on socio-environmental impact businesses and its participants

The survey, conducted by Pipe.Social and Quintessa, has been carried out every two years since 2017. Therefore, in this fourth edition, more than 1,000 impact businesses and more than 11,000 entrepreneurs actively participated. In this way, this broad spectrum of participants ensures that the results are representative and reliable. In other words, providing a comprehensive view of the impact business ecosystem in Brazil.

The Presence in the Southeast and Beyond

The numbers revealed that the overwhelming majority of impact companies (58%) still have their headquarters in the Southeast region of Brazil. However, what makes these companies truly remarkable is the reach of their impact, which extends far beyond the borders of the Southeast. The research showed that 59% of these companies' operations are concentrated in the Southeast region. While 37% operates in the Northeast, 37% in the South, 30% in the Central-West and 28% in the North. In this way, it highlights the dissemination of the influence of impact companies throughout the national territory.

Time on the Market and Business Maturity

When it comes to the age of impact companies, the research revealed that 31% of them are 2 to 5 years old. Another 29% are between 5 and 10 years old, and an impressive 15% are more than 10 years old, demonstrating the growing maturity of this ecosystem. Furthermore, 84% of impact businesses are duly formalized, with 41% of them incorporated as Limited Companies (LTDA).

An interesting trend observed is that some older companies have generated spin-offs, which are new businesses originating from an already established company. For example, in sectors such as green technologies, solutions for agriculture and waste management have branched out to meet the growing demand for initiatives related to the carbon market. It is worth highlighting that 84% of impact businesses are for-profit, showing that it is possible to promote positive socio-environmental impact and, at the same time, be financially sustainable.

Business and Commercialization Models

As for business models, 50% of the businesses surveyed adopt the direct sales model, followed by service provision (36%), single direct sales (32%), and subscription (29%). With regard to marketing, 59% of these companies sell to other companies, 36% establish partnerships with other companies to reach the final consumer, 33% have the final consumer as their target audience, and 26% work with sales to public bodies, tenders and electronic auctions .

Impact Business Finance

The financial health of impact companies is a crucial indicator of their potential for growth and sustainability. Based on information provided by 514 companies that revealed their earnings in 2022, the Socio-Environmental Impact Business Map points out that 29% of them had revenues of up to R$ 50 thousand, 12% had revenues between R$ 51 thousand and R$ 100 thousand, 21% achieved between R$ 101 thousand and R$ 500 thousand, 13% generated between R$ 501 thousand and R$ 1 million, 22% recorded earnings between R$ 1.1 million and R$ 10 million, and 3% surpassed the R$ 10 million mark in annual turnover.

It is notable that, compared to the previous edition of the survey, there has been a significant increase in the number of companies turning over more than R$ 2.1 million per year, increasing from 3% to 15%. However, a persistent challenge is the so-called “valley of death,” in which companies must overcome obstacles to achieve financial sustainability and define solid business models.

According to the data, only 30% of companies declared themselves to be in Traction and Scale stages. In other words, highlighting the importance of supporting the growth of these businesses.

The Profile of Social and Environmental Impact Business Entrepreneurs

Diversity is a hallmark of impact business teams. The survey revealed a balance between men (22%) and women (21%) in leadership positions. Furthermore, 33% of the teams are made up of white individuals, 11% of black and brown individuals, and 1% of yellow and indigenous people. Diversity also extends to sexual orientation, with 15% of companies having founders or leaders who are part of the LGBTQIAP+ group.

In relation to people with disabilities, 5% of businesses declared that they had founders and leaders with this profile. In total, 51% of the founders and leaders are men, 48% are women, and 1% identify as other genders.

When we consider the age range of entrepreneurs, 18% are between 18 and 24 years old, 8% are between 25 and 29 years old. As well, 15% between 30 and 34 years old, and the distribution continues in different age groups up to 65 years old or more. Regarding education, 61% have a postgraduate, master's, doctorate or post-doctorate degree, while 29% have completed higher education.

Key Concepts of Socio-Environmental Impact Businesses

What Defines NISAs?

Socio-environmental Impact Businesses are characterized by their main mission: to create a positive and lasting impact on society and the environment. Therefore, unlike conventional companies, NISAs place social and environmental goals at the heart of their operations. They operate with a “double bottom line” approach, seeking not just financial profits but also social and environmental benefits.

Triple P Approach

The Triple P Approach is a fundamental framework in Socio-Environmental Impact Businesses. In this way, it represents “People, Planet and Profit”. This approach ensures that NISAs prioritize the well-being of people and the planet while pursuing financial sustainability.

Sustainable Business Models

NISAs often employ sustainable business models that revolve around ethical sourcing practices. As well as, ecological initiatives and equitable employment opportunities. These models are designed to minimize negative environmental impacts while generating positive social outcomes.

Benefits of Socio-Environmental Impact Businesses

The emergence of NISAs brings a multitude of benefits to society and the environment. Let's explore some of these advantages:

1. Social Inclusion

NISAs are advocates for social inclusion, creating employment opportunities for marginalized communities and promoting diversity in the workforce.

2. Environmental Conservation

Through sustainable practices and environmentally friendly initiatives, NISAs contribute to the preservation of our planet's natural resources.

3. Innovation and Problem Solving

NISAs are often at the forefront of innovation, i.e. developing creative solutions to address pressing social and environmental challenges.

4. Community Empowerment

These companies empower local communities, therefore, providing them with the tools and resources they need to thrive.

5. Financial Viability

Contrary to the erroneous idea that NISAs are financially unviable, in other words, many of them demonstrate that a strong commitment to social and environmental impact can go hand in hand with profitability.

Socio-environmental Impact Businesses in Action

To truly understand the impact of NISAs, it is essential to see them in action. Here are some inspiring examples:

1. Company A:

This NISA, dedicated to reducing plastic waste, has successfully removed millions of plastic bottles from the environment, recycling them and transforming them into innovative products.

2. Company B:

Focused on providing clean, affordable energy solutions to remote communities, Corporation B has transformed the lives of many by enabling access to electricity.

3. Company C:

By creating employment opportunities and vocational training programs for disadvantaged youth, Company C has become a beacon of hope in an underserved neighborhood.

Frequently Asked Questions: Your Questions Answered

What differentiates NISAs from traditional companies?

NISAs prioritize social and environmental impact in addition to financial profit, ensuring a double result.

How can I get involved with NISAs?

You can support NISAs by choosing to purchase their products or services. As well as, investing in them or even starting your own NISA.

Do NISAs face financial challenges?

While NISAs can face financial challenges, they often find creative solutions. Plus, support from impact investors who share your vision.

What are the key principles of a successful NISA?

A successful NISA is based on a strong commitment to its mission, effective partnerships, sustainable practices, and innovation.

How can NISAs measure their impact?

NISAs use various metrics and reporting systems to track their social and environmental impact. In this way, ensuring transparency and responsibility.

Are NISAs limited to specific sectors?

No way. NISAs operate in diverse areas, from clean energy, as well as healthcare, to education and agriculture.

Conclusion

Finally, the Socio-Environmental Impact Business Map offers an enlightening view of the business scenario in Brazil. Highlighting the growth of these companies, their diversity and significant impact. Therefore, as the impact business ecosystem matures and diversifies, it is clear that these companies will play a fundamental role in building a more sustainable and equitable future.

With information @ CNN Brazil