Who consumes your product or service? How are these audiences being affected by constant socio-environmental and economic challenges? How have you addressed this in your business strategy? Are you monitoring this impact in the short, medium and long term? How is your business affected?
The questions are not simple and the answers involve a depth and complexity that require systemic reflection and active listening.
Many countries, like Brazil, suffer from challenges that opened wounds, mainly during the pandemic, such as hunger; social inequality; precariousness of education; health and others. Unfortunately, this scenario was responsible for making the country look for resources to help solve some of these problems, and those who ended up gaining prominence and taking emergency responsibility were the companies.
According to ABCR (Brazilian Fundraising Association), a record was reached to combat emergency damages in the country, reaching the mark of 7 billion reais in Brazil. The business sector was responsible for 85% of these donations. These initiatives have gained increasing prominence among consumers, shareholders, investors and stakeholders, reinforcing the concern to increasingly make the acronyms of ESG (environmental, social and economic management) alive and practicable. With this work, an old debate returns to the surface and places the expectation of socio-environmental solutions not only on governments, but also on companies.
Another event with global repercussions that reinforced our warning that the socio-environmental and economic challenges will be much greater than those faced was COP 26, the meeting of the United Nations Conference on Climate Change, which took place in Glasgow in 2021. If we do not have systemic solutions to reduce global warming, we will have a very negative medium-term impact on all of us. Companies participated like never before in other meetings and some of them presented how they are committing to and planning public-private partnerships.
Social injustice was also a topic frequently discussed during COP26. Some groups of countries have shown that they are more vulnerable than others to the effects of climate change and that some have more capacity to act than others to avoid the worst effects of this climate crisis. Therefore, governments and companies should be concerned not only with reduction targets, but also address adaptation planning that can be integral, comprehensive and collective.
These themes of climate and social challenges heat up a narrative that is very present in society, not only due to the relevance and responsibility of the private sector to act on the main socio-environmental problems, but also from the perspective of how this sector is affected by these themes in the short, medium and long term. term.
Large companies, which are able to mobilize an entire production chain, have an eye on managing what are called externalities. Externalities can have a social, economic and environmental nature, they can be positive or negative, but they will always be indirect, that is, they are consequences that are not always planned. These externalities constitute costs for an entire society (for example: atmospheric pollution, which affects public health) and a risk for companies in the medium and long term.
The concept of shared value, which involves the generation of economic value for business and society, brings together ways to meet needs, attack these externalities, gain efficiency, create differentiation and expand markets, thus increasing their competitiveness. Thus, shared value is worked on not only as a response to external pressures, but viewed in a strategic and fundamental way for lasting productivity and growth.
The co-creation of solutions with new partners such as startups, NGOs, universities and models that are closer to the public and that offer expertise in solving socio-environmental problems is increasingly present.
The use of technology for these socio-environmental solutions are very powerful practices that are creating opportunities to carry out everything from a diagnosis to building action plans, with a scope and scale that can reduce costs and time, generating a positive impact.
No matter how structured, incredible and dynamic a company is, it will hardly be able to bring together the best conditions to innovate alone. In the concept of open innovation, the main practice is less centralized collaboration including other companies, connecting stakeholders and external partners with the aim of taking advantage of the diversity of knowledge to explore socio-environmental complexity.
Transparency in socio-environmental impact investment also accompanies many of these new solutions, which have been adapted so that they can meet the dynamism expected by companies. This is a great opportunity to show value: transparency and effective impact, which go beyond the number of people reached, but the opportunity for transformation in the community, society and its target audience.
There is no point working to achieve systemic solutions if you don't look at your supply chain. It is vitally important when it comes to a transition to a more sustainable economy. When looking at carbon, for example, the biggest challenge for many companies is
management of indirect emissions (Scope 3 – GHG Protocol). There are very few companies that have set goals for results in this part of the chain. Thus, acquisition and purchasing processes are increasingly being pressured to consider social and environmental aspects in their qualifications.
What contributions has your company put into practice that impact your different audiences, whether internal or external? Who can become one of your allies in building an agenda that includes socio-environmental aspects in internal processes? What skills do you have and who should you count on to internalize this culture and expertise?
These are questions that we need to constantly answer to understand and evaluate how to increase positive impact. Therefore, I invite you to keep these questions alive in favor of increasingly sustainable and fair businesses. Are you prepared for this journey?
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