Latin American multinationals from Mexico to Brazil felt and feel the need to engage with their communities and societies.
by Lourdes Casanova, Senior Lecturer of Management and Academic Director of the Emerging Markets Institute
During the ‘golden decade’ of 2002-2012, Latin America was able to improve upon social ills and reduce poverty by almost 20 percent. Emerging multinationals from Latin America thrived during these boom times and, at the same time, engaged in poverty alleviation programs and sustainable development. Their focus on combining business performance and social responsibility has been a winning formula.
Latin American multinationals from Mexico to Brazil felt and feel the need to engage with their communities and societies. Thus it is not surprising that we can find a number of local multinationals where ethical values have been integrated into their business strategy.
The Mexican company Bimbo is well known for its policy of avoiding lay-offs even in times of crisis and for introducing various incentives to strengthen loyalty and build the notion of common interest among its staff. Brazilian cosmetic company Natura CosmÉticos operates as an ecologically focused brand with a strong emphasis on ethics, transparency and open communication. Natura seeks to create value for society as a whole, integrating economic, social and environmental dimensions.
Astrid & GastÓn from Peru is motivated by profits but equally dedicated to improving social well-being of all Peruvians. Astrid & GastÓn promotes indigenous agricultural products by using traditional and locally sourced ingredients; trains street vendors to meet required health standards, and contributes to Peru’s youth with a Chef School in one of the poorest areas of Lima.
One of the most important social deficits of Latin America is in the domain of education. Thus many Global Latinas are focusing on improving the level of education of their employees. For example, the biggest Brazilian private bank Banco ItaÚ-Unibanco has made education projects as the priority of its social policies. Through their educational program ‘Raizes e Asas (Roots and Wings)’ the bank invests US$12,000 per student. Enova in MÉxico designs, builds and operates more than 42 small educational centres (RIA, Red de InnovaciÓn y Aprendizaje Learning and Education Network) for low-income urban communities. The Inter-American Development Bank has launched an employability program ‘Entra 21’ with the International Youth Foundation and partners from the private sector.
Companies such as the Mexican building materials company Cemex are focusing on building the entrepreneurial spirit of the poorest segments of the Latin American population. In 2000 Cemex launched ‘Patrimonio Hoy (Patrimony, today)’. The initiative combines a micro-credit to help low-income families to improve their houses and provides free advice from Cemex employees and fixed-price building materials. Almost 265,000 families have received a total of US$135 millions in loans in Mexico, Colombia and other Latin American countries.
Global Latinas realize that, as they develop their global ambitions, their home country and the Latin American region in which they operate, need to be strong. This needs that several important social deficits are addressed and the countries and the region are put on a firm path of sustainable development. Government alone cannot do this. A partnership needs to be developed across Global Latinas, the government and civil society. The time is now to reinforce, and move forward on a positive note. As the economic context is becoming more challenging, more than ever, there needs to be a broad consensus on the future of corporate responsibility in Latin America. Businesses, public and private sector and civil society, should collaborate to find ways to make growth in the region more equitable.