Abstract
The goal of this paper is to present tools which allow informal firms to improve their social and environmental performance and become sustainable enterprises. The paper first provides an overview of the informal economy and sustainable enterprises from the perspective of the International Labor Organization. The methodological part consists of a presentation of tools which can be used to facilitate the transition of informal businesses to formality. Tools are divided into two groups: Those which require the active participation of private partners, and others which are based on partnerships between public and private entities. Applications of tools from experiences in different developing countries and mainly from projects run by the International Labor Organization are presented and their achievements and limits discussed. The paper concludes that a more focused approach on the informal economy should be adopted if more positive results are to be achieved in terms of improved social and environmental performance of enterprises. In addition, it highlights that the impact of actions on informal firms should always be monitored and reported even when the focus of projects is not on the informal economy.