Message from the Chair – Sustainability: A Core Value for Latin Americans

WandaBy: Wanda Lopuch, Chair, The Global Sourcing Council

Sustainability and social responsibility in today’s interconnected world, is truly a global challenge. However, the canvas of sustainability and social responsibility with its regional intricacies is painted with the whole spectrum of regional colors and shades. We have decided to dedicate this issue of The Source to Latin America, to bring closer the unique perspective and flesh-out some of the Latin American colors and shades.

Sustainability and Profitability are Complementary

The 2014 good global news is that as the economy improves, so does the focus on corporate citizenship, as the recent report on “The State of Corporate Citizenship 2014” demonstrates (http://ccc.bc.edu/index.cfm?pageId=2180). This report based on research conducted by Boston College Center for Corporate Citizenship (BCCCC), offers a snapshot of executive thinking on sustainability, and tracks current thinking and trends in the C-suite for the sixth consecutive year.

This year’s significant shift in executive perception is such that sustainability and profitability are complementary now. 750 CEOs and C-level executives from large companies in North America and Europe, care more about sustainability and social responsibility in 2014, not only because of business ethics and values, but as a platform for business results. Executives’ focus on environmental, social and governance investments (ESG) is framed by such factors as talent availability (talented people are actively seeking companies that care and show that they care), innovation and profitability (long-term results are consistently improved by sustainability driven innovations), and the ultimate goal: satisfying consumers.

2014 consumers care, and they show it with their wallet. Moreover, Millennial consumers and employees, who care even more, are gaining more purchasing power or organizational influence.

According to 2014 Nielsen research of 30,000 consumers from 60 countries (“From Brand Concern to Willingness to Pay” (www.nielsen.com) sustainability actions from consumers can result in 5% sales increase. This number is going to increase sharply as Millennials gain more prominent places in society. Executives notice and do their homework.

Latin American Consumers Drive ESG

On the issue of environmental, social and governance (ESG), Latin American consumers stand out from consumers in other geographic regions; they differ in their preferences, expectations and intentions to vote with their wallets, according to the Nielsen research. As the graph below shows, executives’ views (grey bar) on issues of concern in the ESG area (BCCCC study) diverge from those of their consumers. This discrepancy is most pronounced for the Latin American consumers (yellow) who place far more emphasis on social and environmental issues- areas that most executives have not fully integrated into their corporate agendas… yet

wanda graphSource: BCCCC 2014; The State of Global Citizenship; www.bcccc.net

Latin American consumers exhibit distinct differences in their views and perceptions on social values; they make their purchasing decisions based on considerations for sustainability and social impact. As per the Nielsen survey, 62% of respondents (blue bar) say they check the product label to ensure a company’s and brand’s commitment to positive social and environmental impact.

wanda graph2
Source: Nielsen “Doing Well by Doing Good”, June 2014; www.nielsen.com

Nielsen also reports that Latin American consumers are willing to vote with their wallets for products they care about.

Source: Nielsen “Doing Well by Doing Good”, June 2014; www.nielsen.com

In crafting their strategies, corporate executives are integrating consumer preferences and long-term social trends, along with the socio-economic challenges of Latin America: political uncertainty, weak local economies, governmental institutions unable to provide social services, frail and underfunded educational systems, difficulties in creating a sustainable backbone for innovative economies across the region, and a high level of inflation – just to name a few.

In this issue of The Source, you will meet a few companies from Latin America that navigate this everything but simple landscape, and lead their enterprises into the future. Our intent is to share some of the best practices of the leaders who walk the talk of sustainable business development, so we can not only appreciate their unique challenges, but also learn from their experiences and adopt them into our own environments.

Please submit your comments to contactgsc@gscouncil.org. We will share your views with the community.

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