New investor profile will reorient the economy

In the third webinar of CEBDS's ReVisão 2050 series, executives stated that funders' decision-making is increasingly guided by social impact.

Rio de Janeiro, May 27, 2020 – The profile of investors should influence and reorient the core business companies toward a more sustainable business model. In addition to the variables of return and risk, financiers' decision-making is increasingly influenced by a business's social, environmental, and governance impact. Social disparity in Brazil is not limited to access to basic infrastructure, but also to credit lines and financing for micro and small entrepreneurs. Therefore, it is essential to direct investments toward reducing social inequalities on all fronts.

In summary, this was the main message from participants in the third webinar in the ReVisão 2050 debate series, hosted by the Brazilian Business Council for Sustainable Development (CEBDS), which aims to plan and build a vision for the post-pandemic future. The third meeting, broadcast live on CEBDS's YouTube channel, sparked discussion on finance-related issues in light of the current COVID-19 pandemic.

"The lack of access to credit and the precarious digitalization of the population in various parts of the country, taking into account Brazil's continental dimensions, are warning points," said Marina Grossi, president of CEBDS, who opened the discussion by presenting data indicating that 301,000,000 Brazilians are not included in the banking system and that, of every 10 without bank accounts, 6 are women, the majority of whom are Black.

For Leonardo Letelier, CEO of Sitawi Finanças do Bem, who moderated the debate, the path forward necessarily involves engaging with the sustainability agenda, whether as a consumer, citizen, entrepreneur, or investor. "We demand more sustainable products, but we go to the supermarket and buy the cheapest option. We want better politicians and policies, but we're not interested in participating in political discussions. This transformation requires greater participation from everyone," said Letelier.

Microsoft Brazil CEO Tânia Consentino noted that there's still pressure from investors to focus solely on financial results, but that this is beginning to change. "Economic results at any cost are not sustainable, and we're realizing this with the COVID-19 pandemic," she highlighted. She believes there's a sense of urgency in this process of transforming business models focused solely on financial results. "We can't wait until 2050. That's why I argue that change must occur by 2030," she stated, highlighting structural issues (universal access to basic sanitation and electricity, for example) and the incorporation of externalities into the measurement of national production as priorities. "You can't just measure what you produce. More important than that is measuring how you produce," she explained.

Nabil Kadri, head of the BNDES's Environment and Amazon department, advocated for a broader concept of finance, valuing more sustainable investments. "Instead of punishing, recognize, encourage, and boost those businesses that incorporate environmental, social, and governance variables into their framework, with more accessible credit lines and financial advantages in pricing and payment systems, working capital support, risk ratings, among others," he explained. This continued stimulus in the business environment, the BNDES executive argued, must also extend to stakeholders who interact with these companies, such as suppliers, so they can also advance this agenda. For the head of the BNDES's Environment and Amazon department, the Brazilian financial system needs a new overhaul. "In recent years, there has been investment in cooperative banks. The new frontier is FinTechs," he stated.

Luciano Gurgel do Amaral, Investment Director at Yunus Social, argued that credit is a raw material for the process of social transformation. "This crisis has clearly exposed our social fragility; it has made it clear that our social fabric is not prepared to deal with a health crisis. And we are also not prepared for other crises, which will certainly come, because they are recurrent in our history," he warned.

The Yunus Social executive questioned the role of economic agents within the current business model. "What else is needed for economic agents to realize that an economy based on carbon, animal protein, inequality, income concentration, misused artificial intelligence, etc., is part of the system? This model undermines our social defense systems. Therefore, companies should stop generating these autoimmune diseases and switch sides, developing systems to defend society," Amaral stated.

Next agenda

With the coronavirus crisis, CEBDS is holding discussions among its member companies and multisectoral experts on business resumption and long-term planning, revisiting the commitments defined in the Brazil Vision 2050 document, launched at Rio+20 in 2012. Webinars are also planned to discuss Food, Energy, Biodiversity and Forests, Circular Economy, and Cities, with the aim of thinking about the post-coronavirus future.

The webinars feature representatives from the nonprofit sector and are held biweekly on Wednesdays from 8:00 a.m. to 9:30 a.m., free of charge and open to the general public. The Vision 2050 Webinar series is sponsored by Vale and Itaú, and supported by SESC, Sitawi, KPMG, and ERM. 

FULL PROGRAM:

ABOUT CEBDS

The Brazilian Business Council for Sustainable Development (CEBDS) is a non-profit civil association that promotes sustainable development through articulation with governments and civil society, in addition to disseminating the most current concepts and practices on the subject. Founded in 1997, it brings together around 60 of the largest business groups in the country, responsible for more than 1 million direct jobs. It represents in Brazil the network of the World Business Council for Sustainable Development (WBCSD), which has almost 60 national and regional councils in 36 countries and 22 industrial sectors, in addition to 200 business groups that operate in all continents. More information: https://cebds.org/.

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