Conscious capitalism is being designedOurOur Artemis Project Brazil member Francine Pena Póvoa, director of Legacy4Business Consultoria e Treinamento, was featured in an O Globo Brazilian newspaper article this week.

Conscious capitalism is being designed

Our Artemis Project Brazil member Francine Pena Póvoa, director of Legacy4Business Consultoria e Treinamento, was featured in an O Globo Brazilian newspaper article this week. She presented to executives from large and medium-sized companies from the business school FDC a study that shows how what is globally called conscious capitalism is being designed, in which companies seek to meet the concerns of their stakeholders and the communities in which they live.

A new business vision is consolidated by the understanding that it is necessary to divide to add. There is an ongoing structural reform of capitalism where companies adapt because they understand that profit is no longer everything. If there is no division, there will be nothing to add later. More and more young executives and business leaders are being trained for this new view of business in which the focus shifts from shareholders to the so-called stakeholders (the whole community that makes the company work).

In 1970, in an article published in The New York Times, the economist Milton Friedman, pope of the Chicago School of Economics, produced the phrase that marked an era: “The social responsibility of business is to increase its profits.” In Brazil, the then Minister of Finance Delfim Netto reaffirmed Friedman’s theory: “First you have to make the cake grow, and then divide it.” Both were saying the same thing. Only with profit can we obtain sustainable growth that will, in time, guarantee benefits to the poorest. This concept is outdated. There are other priorities on the horizon of modern companies.

Francine Pena Póvoa, director of Legacy4Business Consulting, presented this week to students from Fundação Dom Cabral (mostly executives from large and medium-sized companies) astudy that shows how what is globally called conscious capitalism is being designed, the exact name of the book by John Mackey and Raj Sisodia, written in 2013 and which inaugurated this new perspective of capitalism, in which companies seek to meet the concerns of their stakeholders and the communities in which they live. Hence the popularization of the ESG (environment, social responsibility and governance) concept in the business world and companies’ growing interest in issues exotic to the corporate environment, such as health, well-being, responsible consumption and gender equality, for example.

We must think differently on a planet where hunger kills 21,000 people a day and 5.6 million die each year due to a lack of access to health care, and it is no longer possible to exist in this environment. According to Professor Colin Mayer of Oxford University’s School of Economics, “the purpose of business is to solve people’s and the planet’s problems profitably, not just to profit by causing harm. What a few years ago seemed only a romantic vision of young economists today is a business strategy for large global and national companies.

In Brazil, 52 million live in poverty, and 13 million are extremely poor. Only one in four children receives three meals a day. This misery, combined with the catastrophic effects on the economy caused by the pandemic, has reduced the life expectancy of Brazilians by four and a half years. Given this picture, companies need to adapt to help their community grow along with them. The businesswoman Luiza Trajano says, “a company that is not concerned with its human capital, that is not aware of its social role, is statistically proven not to last.” Gerdau’s CEO, Gustavo Werneck, states that “profit is not enough for the company to perpetuate itself and continue generating value to society over time.

Indeed, governments alone cannot do everything. The collaboration of companies like Gerdau and Magazine Luiza is essential and even vital for the change one wants to make to improve people’s lives. But in Brazil, the government not only does nothing but also plays against it. Congress, for its part, collaborates not with Brazil but with the government. The diffuse interest of governing and opposition congress members approve things like the electoral PEC and the secret budget, which divert public resources that should be used in a structuring way for parochial works and private pockets. Brazil is improving in the private sector but still needs to improve in the public sector. A lot.