A recent article published in Valor Economico, one of most prestigius newspaper in Latin America, (Sustainability is more in the speech than in practice, September 12, 2017) proposes the questioning and reflection on the extent to which sustainability – and I am using the same term that the publication and the research used, despite believing that it is already worn out and has become a “pregnant word” where everything fits in – sustainability is a part of and incorporated into business. Some interesting highlights of the subject (about which I add some brief reflections from my work experience and experience in companies from different sectors and in different countries):
- Between 2014 and 2016, the number of companies where the sustainability agenda is led by the CEO grew from 51% to 78%: incorporating the theme into corporate governance and being captained by leadership is extremely relevant because it signals a company flag to its internal and external public, but it must be deployed to other levels of governance and translated into an effective action plan to take place. The mere “presence” of the theme with the high leadership will not guarantee the incorporation and translation of sustainability into business and corporate practices.
- The most associated initiative with the practice of sustainability is the reduction of expenses due to efficiency improvement (79% of respondents): for me this is a reflection of a still limited vision focused on productive and operational processes and that is far behind the potential to leverage the company’s business by addressing the issue of sustainability (and corporate responsibility). I wonder if it is an inheritance of the health, safety and environmental culture that has gained strength in Brazil since the 1980s – that is, the most remembered focus is that it has a connection with something relevant and growing that happened 30 years ago! Obviously the theme of process efficiency, waste management, reduction of socio-environmental impacts in operations and in the chain is something that is highly relevant and challenging, but should not be the most relevant point in the 21st century
- Sustainability as an important element for the recovery of corporate image (cited by 68% of respondents): at the moment, considering Brazilian context, issues such as ethics, transparency, compliance and anti-corruption have become key elements for the management of risks and opportunities for companies and this has and will have repercussions on the internal and external publics by addressing issues such as attraction and retention of labor, brand perception, branding, risk management in operations, supply chain relationships, just to name a few areas
- A very significant increase rate in people who consider that companies promote sustainability, but are not really engaged (63% to 93% in 2 years): for me this is the X of the issue in relation to sustainability and business. The theme will only be incorporated into the business and engaging the internal audience when and if it is “translated” into issues relevant to the different areas. Without this I do not believe that there will be significant changes.
The task mentioned in my comment to the last point is not at all easy. As I always say, it’s been almost 20 years since I (like other professionals). To give a concrete and real example of what I am putting forward, I will tell you a brief history that occurred a few years ago in a meeting with a large Brazilian company:
I was facilitating a meeting to discuss a strategic sustainability policy when the director responsible for the HR area for gas and oil (one of the company’s areas of activity) told me that he did not understand why he had been called to the meeting since he had no relation with the theme. I commented if he remembered the BP accident and the paralysis of operations in the Gulf of Mexico. As he was speaking to “sustainability people” he promptly expressed his solidarity with the animals and the environmental impact on the ocean caused by the spill. Faced with this comment I told him that the BP accident in the Gulf of Mexico had been positive for the company that can “repatriate” domestic and foreign labor to work in Brazil but at a cost of 3% to 6% increase in wages , but that this would not last because operations in the Gulf would be resumed and other companies would start the dispute for highly qualified labor, which would tend to increase costs. And I asked him how long it would be sustainable to “afford” this increase and think that this was an efficient strategy for the company from the point of view of obtaining and retaining manpower. He asked if I had experience with HR or had analyzed the numbers and documents in his area. My answer was: do not just study sustainability. And he stayed in the meeting until the end!