Social Enterprises and B-Corps in Ecuador

Abstract

Ecuador is at the forefront when it comes to legal innovations. In 2008, it was the first country in the region to recognize rights to nature, and in 2020, it became the fourth country worldwide to incorporate a discussion on the benefit of a BIC corporation status into its legal system. BIC corporations enable Ecuadorian companies to prioritize stakeholder governance, transparency, and sustainability in management as well as corporate behavior, driving change in markets. Since their recognition, for-profit corporations in Ecuador have had the option to transform their governance and prioritize the generation of positive material impacts by committing to solve one, or many, social and environmental problems through their business models. This article explains how this small country in Latin America managed to insert this innovation into its legal system and how the recognition of BIC corporations marks a major milestone in the process of changing systems in the region.