Brazil’s recent economic growth has been impressive but companies need to work with civil society to develop a concrete responsible business agenda that will last By Dom Phillips in São Paulo

In May, during the annual conference of Abal, the Brazilian Aluminium Association, one of the delegates made a joke. Rubens Harry Born, associate executive coordinator of Vitae Civilis – a Brazilian NGO concerned with development, environment and peace – quipped that five years ago, it would be hard to imagine someone like him sitting on a panel next to businessmen and government specialists. As for 10 years earlier, “I certainly wouldn’t have been called,” he said.

For corporate responsibility specialist André Palhano, who writes a column for Folha de São, Paulo Brazil’s biggest newspaper, it was a watershed moment. He quoted it on his blog. He believes that, for corporate responsibility, Brazil is leading the way. “In Brazil we are very advanced in comparison to other countries in Latin America,” he says. “Philanthropy has evolved into something that is intrinsic to company management.”

Marcelo Linguitte of São Paulo consultancy Terra Mater, which works with business on corporate responsibility, believes that this is because companies have realised it makes business sense. “There are three factors: business opportunities, image, and the big question of social society,” he says. “Companies have begun to realise that as well as being good for society, it’s good for them.”

And nobody wants a PR disaster, as was dramatically illustrated in June 2009 when Greenpeace published its Slaughtering The Amazon report. Following three years of investigation, the report showed that cattle farming was the major cause of deforestation in the Amazon. It fingered not just Brazil’s biggest meat producers, but major international supermarket chains as well.

The reaction was instant: within days, three of Brazil’s top supermarkets – Pão de Azucar, Wal-Mart and Carrefour – had banned beef products produced in deforested areas. By October, the country’s four biggest meat producers – JBS-Friboi, Bertin, Minerva and Marfrig – had adopted new environmental standards to ensure they did not use cattle raised in newly deforested areas.

Greenpeace Brazil’s Marcio Astrini says that the report helped create great indignation in Brazilian public opinion. “In a little more than three months, the meat processors were around a table signing a document guaranteeing that the problems denounced would be resolved.”

Avoid scandal

Daniela Aiach is manager of corporate events for Latin American business association Amcham – 80% of whose companies are Brazilian. “Investors don’t want to invest in a company that has had an ambient or ethical scandal,” she says. For 28 years Amcham has awarded an Eco Prize. It does not have its own corporate responsibility programme but is helping its members develop their own strategies, forming regional sustainability committees for companies and publishing a how-to guide.

“We are migrating from having social projects, to include the concept of sustainability in management,” Aiach says. Whereas in the past, a business might fund a crèche or a new square – because Brazil has a long tradition of private philanthropy – today big businesses create their own social projects. “I think that Brazil is a pioneer in this area,” she says.

A landmark partnership example between business and an NGO is the Rio São Bartolomeu Vivo (Living St Bartolomeu River), created by Banco do Brasil in partnership with the environmental foundation Funatura. The project is diagnosing the state of a key river and educating local communities into how to live and work in and around the river sustainably.

In almost a decade of constant economic growth, the government of Luiz Inácio Lula da Silva, Brazil’s president, has taken 30 million Brazilians out of poverty. Half of the population is now classified as “Class C” – lower middle class.

But in Rio alone, more than a million people still live in shanty-towns, or favelas. “You can’t simply ignore social problems,” says Marcelo Linguitte. Consequently Brazilian companies have a huge responsibility to develop social investment programmes and work in education, health and skills development.

“Companies are being pushed to do something about it. There is an enormous amount of media talk about sustainability,” says Alex Spatuzza, editor of Brazilian sustainability website Revista Sustentabilidade. But she argues there is a lot more talk than action. “Companies put out sustainability reports every year but there are no standards, there’s no transparency and they don’t give historical figures for their actions.”

It is São Paulo, Brazil’s economic engine and richest state, that is leading the change. There are 1,352 companies associated with Brazil’s leading corporate responsibility organisation, the Ethos Institute, and 54% per cent of them are in São Paulo. Ethos has seen success with its Akatu.net conscious-consumer website. And it is now the fashion among São Paulo’s upper middle class to carry reusable shopping bags when visiting the supermarket.

The growth problem

But a growing economy like Brazil’s needs more energy – as the October 2009 blackout, which afflicted 40% of the country, showed. And if the economy does not keep growing, Brazilian consumers will not be able to vote with their pockets and force companies to improve their sustainability programmes. In the meantime, the way forward is for NGOs to work creatively with business to push the agenda.

The Amazon is a good example. Here farmers of all sizes are under fire for deforestation by environmentalists and the government. This vast wilderness is home to 20 million people, many of whom were encouraged to colonise Brazil’s wilderness by previous governments, and many of whom are little more than subsistence farmers. And they are often the target when the battle lines between sustainability and economic realities are drawn. “Greenpeace set the standard; they created this uproar,” says John Carter, director of NGO Aliança da Terra (Land Alliance). “But there are no easy solutions.”

Aliança da Terra tries to work with both sides. “We create economic incentives and practical ways to help farmers and landowners to be more environmentally friendly,” Carter says. He is an American farmer who owns two ranches in Brazil. Of 300 farms covering 2.2m hectares surveyed by the NGO, half have adopted its recommendations. “Today 51% of the land in our system is in native education,” Carter says.

On a larger scale is the Movimento Cyan (Cyan Movement). Funded by Brazilian brewery multinational AmBev, Movimento Cyan is an innovative partnership developed with WWF and the University of São Paulo that will work on cleaning up water supplies and rivers. The organisation is investing 44m reais in sustainability in 2010 alone.

“The change in behaviour of companies always comes after strong public pressure motivated by denunciations,” says Greenpeace Brazil’s Marcio Astrini. “You have a big number of NGOs in Brazil and they have an important role,” counters Daniela Aiach of the Amcham business association. “But the companies are leading this. They can’t count on the government, so they have to initiate.”

The reality is that both sides are right. NGO pressure is vital to keep corporate responsibility moving in Brazil. Business rarely reacts unless profits are threatened. Despite the economic successes of President Lula’s left-wing government and poverty-busting initiatives such as the Bolsa Família income support fund, Brazil, at heart, is a deeply capitalist country. Its population has an instinctive mistrust of state intervention. It is the bottom line that will drive corporate responsibility and sound business sense that will keep the agenda moving.



Related Reads

comments powered by Disqus