Latin America's Expectations of CSR Evolve

Latin American consumers in countries such as Brazil, Bolivia, Ecuador, Argentina and Venezuela are increasingly expecting a new breed of CSR. Bubbling to the surface is the convergence of ideological, political and the persistence of unresolved social problems, not the least of which include child labor, unfair labor practices and gender discrimination. Pizzolante Comunicacion Estrategica Chairman Italo Pizzolante Negron offers insights into the CSR transformation afoot in this region of the world.

According to Pizzolante, the only way a nation can evolve politically is to treat social struggles through a conscious modification that requires a priority in what he calls the "social management" of both corporations and public entities. "There is a kind of 'social warming' taking place in Latin America that is affecting the sustainability and reputation of many companies," says Pizzolante.  By 'social warming,' he's referring to issues such as increased regulation, auditing, intervention on the one hand and social problems that directly impact the lives of those discriminated or wronged in some way. According to him, Latin Americans are more aware and determined to act in ways that defend their rights. As such, it's no surprise, he says, that KPMG's November 2009 report entitled Out of Adversity indicates that 61% of Latin American companies claim to be making significant changes to their short-term business strategies, while 59% report to be rethinking their long-term plans radically. When you add to these attitudinal changes the speed at which communications occur, and you end up with a greater gap between a company's interest and a society's CSR expectations. This is particularly apparent, says Pizzolante, with multinational organizations because the majority try to provide a particular group with CSR global programs that are not contextually appropriate for that region.

"All of these factors accentuate a lack of confidence in private enterprise," adds Pizzolante. "According to Latinobarometro 2009 (an annual public opinion survey of 19,000 people in 18 countries), only 42 percent of people have some or a lot of confidence in private enterprises, ranking them eighth among 15 institutions, demanding that corporate leaders revise their models of management and create a shared perspective" toward CSR. Pizzolante mentions that in February 2010, 859 international corporations were scratched from the United Nations Global Compact and the Global Reporting Initiative for failing to report on their progress.

"For example, fair trade initiatives have become more than just a brand to promote more equitable trading conditions," he adds. "Rather, fair trade is a way to connect concerned consumers and attentive producers in order to combat poverty and guarantee sustainable livelihoods. Though fair trade products are more expensive, many consumers see additional value in supporting labor rights of banana producers in Peru, protecting the environment for beekeepers in Chile and empowering coffee co-operatives in Costa Rica, among other issues. Consumers used to be interested in product; now they are also concerned about the way it gets to the shelf.

"Latin American consumers are demanding an evolution from corporate social responsibility to socially responsible corporations, aksing business leaders to understand CSR not as a way of 'compensating' for a company's impact but to create truly responsible business processes. A company can become a socially responsible corporation by syncing its goals with the expectations of society. To do so, strategic communication must be used as an important instrument for institutional strengthening, guaranteeing the coherence and consistency between what we say as a company and what we do, inside and out."

Pizzolante reminds those not aware of these significant changes in Latin America that understanding an organization's performance today goes way beyond financial factors to include new environmental and social aspects. "Today, more important than producing a change of culture is creating a culture for change. Only a leader with creative energy and thinking is capable of finding new approximations that guarantee business sustainability and a new state of awareness that promotes the challenge of a 'social model' [amongst] company-society-government, taking into consideration all interests at stake."