Brazil: Trying to Achieve the Right Balance in CSR

Relative to India and China, Brazil appears to be the most balanced in terms of its corporate sustainability orientation, although addressing social issues is still paramount. In addition, discourse about the Amazon–its importance to Brazil’s future development, its role in climate change, the importance of protecting its natural resources, and the question of land tenure in the region–also shapes the agenda. More recently, corporations have become increasingly alarmed by the so-called “talent blackout” facing the country, and they are focusing financial resources on education programs.

In terms of the forces shaping Brazil’s CSR agenda, civil society is vibrant and has been effective in lobbying for specific causes. Society is also becoming more open to opinions from international NGOs focused on effective governance of the Amazon. Meanwhile, business is characterized as the productive sector–one that is pragmatic in its dealings with civil society, government, and foreign value chain partners. As a result, transparency on corporate sustainability performance is growing, as shown by the popular uptake of the Global Reporting Initiative (GRI), and civil society is holding corporations to account for their sustainability performance.

In contrast, many view the federal government as ineffective in its CSR role due to excessive bureaucracy, or what companies call “the Brazil cost.” While regional governments are piloting new legislation (Rio de Janeiro, for instance, is developing a carbon credit scheme), there is skepticism about whether these programs will really take off.

The Future Focus of CSR

Unsurprisingly, there is not a “one size fits all” approach to corporate sustainability in these new geographies. However, there are certain commonalities among the countries that can be gleaned from the research–and those will be important for companies’ CSR strategies going forward.

Prioritize social and economic development: Brazil, India, and China are still in the throes of rapid social and economic development, with all the challenges and opportunities that such growth entails. Companies in these markets are approaching corporate sustainability as a nation-building tool to improve development outcomes. For example, companies in Brazil are building educational institutions and are training teachers to populate them. In India, companies are being called upon to build bridges, hospitals, and other infrastructure. In China, they are expected to help build a harmonious society. In all these cases, the role of business in society is underpinned by a broad expectation of corporate paternalism.

Don’t underestimate the need for stakeholder approval: Corporate sustainability in these markets is focused on seeking approval and gaining legitimacy from a broad array of domestic and, in some cases, global stakeholders. In China, for example, corporate sustainability emphasizes alignment with government priorities on sustainable development: Companies seek approval from the government for their actions in this regard. In Brazil, corporate sustainability is driven by local reputational considerations and also by an increasing need to gain legitimacy among potential (Western) value chain partners looking to invest. And in India, companies seek approval from communities to acquire local license to operate. International frameworks like the GRI and UN Global Compact provide structured processes for companies to collect and report data that legitimize their actions in the minds of multiple stakeholder groups. This appears to be particularly important for “home grown” companies that are growing globally.

It is clear that the research to date on the new geographies of corporate sustainability has only just begun to surface the many insights on the topic in emerging markets. Further work is needed to expand the dialogue beyond Brazil, India, and China to engage a broader, more diverse audience from business, civil society, and government, and further test some of the observations gathered thus far.