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Time to do it right

Fabio Barbosa
CEO of Abril SA, and a 2012 UNEP Champion of the Earth

Sometimes, when analyzing a successful project that started many years ago, hindsight makes the decisions taken seem much easier, obscuring the context of all the uncertainties of that time. I say this, because it is now much more common to talk about sustainability in the financial service industry than it was when I decided to follow such an approach some 15 years ago.

I started on the journey in 1996 at Banco Real/ABN Amro (Brazil), repeatedly insisting — in a good soccer metaphor for Brazil — that “the game is hard, but we must aim at the ball and not at the opponent´s leg”. This caused some shock; people might not express negative reactions in front of me, but whispered behind my back that, though nice in theory, it would not achieve results. On many occasions very skeptical people told me: “in order to get through life, especially business life, you have to compromise, find the shortcuts.” I have never done that. I have always chosen the path of transparency, of respect, to guide me day-to-day. I always believed that the way you do business — not just the results, but the way you get them — is very important.

The Banco Real/ABN Amro in Brazil sustainability project — and the huge range of initiatives that support it — expresses these beliefs. More than a management model, sustainability is, ultimately, the best way of expressing my conviction that we can succeed by doing the right things the right way. Sustainability is intrinsically linked to business strategy. It is very far from being just philanthropy, and for that reason I don’t like the concept of ‘giving something back’. It is a matter of consciousness about daily activities. At Banco Real, for example, we started incorporating socioenvironmental aspects into credit risk analysis, and this helped us to understand that if a company treats its employees well and maintains a healthy relationship with the environment, it has a higher probability of being economically sustainable. We also created new products and lines such as our Ethical Fund — a socially responsible investment fund — ways of financing treating effluents and converting cars from petrol to natural gas, and microcredit operations. And we improved our relationship with the local community and suppliers.

When I addressed the Brazilian financial service industry, through FEBRABAN (the Brazilian Banks Federation), I talked about selfregulation, about how to improve the financial system’s dialogue with various sectors of society, about being closer to all the stakeholders and about deepening the relationship with consumer protection agencies, unions, and the press.

A strong quality financial service system is vital for Brazil and our society. Since the beginning of the crisis in 2008, the financial system has been tested several times: yet in Brazil, unlike in many countries, banks have been part of the solution not of the problem. In a nutshell, banks add value to society by doing three things: protecting and remunerating savings; financing consumption and investments, and providing a mechanism for payments. By doing these things properly, they help national development. And it is even more important to advocate and encourage transparency and ethics in such a way as to align the interests of society and financial institutions, and make them converge.

We live in a time of great changes, with increasing access and dissemination of information, and with increasing transparency in relations between individuals, organizations and even countries. There is no longer a world of “ON” and “OFF”, we are “ON” all the time. Companies and organizations need to be alert to these changes and to the new demands of an increasingly open society.

Milton Friedman once said: “The business of business is business.” As I understand it: “The business of business is sustainable business”. This has long been clear to me, since companies need to exist for many years in a constantly changing society. Sustainability is now a new way to create links with customers, employees, suppliers and shareholders, so all companies in all sectors have to find their own ways to insert it into their core business.

Making all these changes creates new demands, new markets and new business models. So we must think and act systemically. We cannot give up the economic aspect, but we must integrate social and environmental dimensions in all decisions: is not a matter of either/ or but of both/and. Consumers are more aware of their rights and duties, and require the same degree of awareness and responsibility in companies’ performances. In times like these, the best way to look to the future is through observation and innovation.

We can only evolve as a society if we accept the balance between rights and obligations — and if we comprehend that we cannot just keep charging governments for solutions and actions, but we must participate and contribute through our day-to-day actions. Society and the world is made out of our attitudes. The good perspective is that the message that each one of us, as a protagonist, is spreading around. It is a new frontier, a new approach, and all citizens are set to win.

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