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In an interview, Priscila Claro addresses the importance of those topics and the challenges for companies to develop them, especially in this period

Following the joint efforts of the entire Insper Community to mitigate the impact of COVID-19, we are publishing a series of interviews with professors, managers, deans, and directors to address actions taken by our school, as well as tips and guidelines in the most diverse fields to help overcome the challenges of this period.

In the following interview, Priscila Claro, Associate Professor, and Coordinator of Extension and Social Responsibility at Insper addresses the importance of Corporate Social Responsibility and Environmental Sustainability and the challenges for companies to develop them, especially in this period:

1) Why is it important for companies to position themselves in a socially responsible way? Does this stance become more relevant in times of crisis?

I think this question refers to the basic premise that companies are part of an ecosystem. Assuming that the company is influenced by its context is relevant in any situation, and especially important in times of crisis. Not recognizing, understanding, and considering the contextual aspects, positive or negative, in decision-making, can be risky.

I do like a phrase, by an unknown author, which is more or less like this: “No company does well in a community or country that does poorly.” It puts into perspective the current moment of a pandemic. Why are companies in all sectors trying to innovate socially? Because, in the long run, it is a question of survival.

Social responsibility is not just about doing charity with shareholder money. It can even be like that if the parties so agreed. Social responsibility is doing the right thing in the right way. It considers a company’s positive and negative impacts without disregarding the fact that there is also an owner/shareholder who takes risks and expects financial results. In this journey, some companies end up identifying a society’s pain that can be solved via a new product or service, that is, a new business opportunity.

2) What are the main challenges for companies to remain socially responsible or to develop themselves in this sense in a crisis scenario like the one we are experiencing now?

Implementing a management model that considers the interests of not only company owners but also a wide range of stakeholders is not trivial. Besides identifying all internal and external stakeholders, it is necessary to prioritize them and define the strategy for relationships with each group. In some cases, it will be necessary to monitor and report on the company’s actions and results. In others, it is desirable to integrate some stakeholder groups into the broader planning process. One of the biggest challenges, in my perception, is this integration process. How to integrate? Moreover, after integrating, how to resolve conflict situations when there is a disagreement between the owners and other stakeholders concerning organizational means and objectives?

A company needs to have clear policies and consistent decisions regarding the interests of its stakeholders and its position of social responsibility. Talking and not doing is just as bad as doing something other than what is said.

3) What are the main aspects that must be taken into account when planning management with stakeholders at this time?

Undoubtedly, companies that already had that practice and culture of integrating stakeholders’ interests into the decision-making process are being more agile in this moment of crisis. Why? Because the relationship already existed, thus, accessing the partners ends up being more efficient. It will not be necessary to start a new relationship, develop a new channel.

For companies that had not yet operated in this model, my suggestion, in the short term, is to integrate as much as possible their employees in the decision-making process in the context of crisis. Associates are, in most cases, extremely valuable stakeholders, for they know several other stakeholders and the organizational environment. That is a pity that in several companies, they are not yet considered in the decision-making. I do not mean strategic-level executives only. I refer to frontline employees who are in contact with suppliers, clients, neighborhood, or civil society representatives, among others. Not to mention that those same employees are also suffering from the crisis. They need to adapt to remote work, often without the necessary technology and space, having to share the “sacred” place of personal and family life with their labor obligations. Moreover, this has created a difficulty in separating what work is and what is life outside of work.

In virtual conversations, I have noticed that most people are working 24 hours a day, seven days a week. Besides the evidence already surveyed by other colleagues and researchers, about the potential increase in depression, due to the fear and uncertainties of the pandemic, I think we will also have to deal with an increasing number of burnout cases. Therefore, the importance of taking care of employees. Not firing them and promoting financial security is just the beginning. It is necessary to encourage mental health. One of the ways to do so is to integrate the employee into the process of thinking about the critical decisions to overcome the crisis. It is to integrate the employee into the process of thinking about social innovation. That can generate a long-awaited feeling of purpose and can be good for everyone. Some companies are already doing so and achieving good results.

4) In your opinion, can this crisis make the topic of social responsibility even more relevant for companies and society?

I think so. Historically, companies have not committed themselves to seek alternatives in times of crisis. However, as capitalism developed, companies began to play a more critical role in issues related to social and environmental well-being. Nonetheless, it is obvious that not all companies assume these responsibilities.

Today, we are learning the hard way, for an awful reason, that together we are stronger. The same is happening in the business environment, for instance, with some competitors joining forces in partnerships to think about solutions and assist their value chains. Companies have connected with governments to work together to combat COVID-19.

Although the driver for it is bad, I usually tell my students that, no matter what had motivated decision-makers’ behavioral change in favor of more responsible management, what matters most is to act.

5) Regarding environmental sustainability: What are the main challenges this new crisis has brought, and what are the ways to overcome them?

Today we have the new coronavirus, but climate change and its impacts on our daily lives have been before our eyes for a long time. Our choices have influenced those changes as well. Although the impacts do not happen at the same time and globally, as with the pandemic, they are cumulative. Tomorrow they may be a new virus, a new bacterium, a drought, a large-scale fire, a severe water crisis, among other problems that we already experience.

I think the main challenge is to recognize and consider that it is not possible to grow indefinitely in an environment with limited natural resources (many of them non-renewable ones). From the moment we consider this premise, we will make better decisions at government, public policy, and business decision levels, and regarding the way we live and consume. At the end of the day, all of those decisions are made by individuals. We have to stop blaming others and do our part. We need to be protagonists of the environmental and social changes necessary for us to live more and better.

Priscilla Claro is an Associate Professor and Coordinator of Social Responsibility and Extension at Insper. She is a Ph.D. in Administration by the Federal University of Lavras. She also earned a Master’s degree from Wageningen University (WUR) in the Netherlands, in Social and Environmental Management, and has a bachelor’s degree in Business Administration from the Federal University of Lavras.

Prof. Claro conducts research projects in the fields of corporate sustainability and sustainable cities. She also develops consultancy and research in the fields of corporate responsibility and sustainability, as well as sustainability reports under the GRI standard. Prof. Claro worked at the Agricultural Economics Institute in The Hague, Netherlands, as a Junior researcher (2002-2003). She also served as a researcher at PENSA (the Agribusiness Intelligence Center) at the School of Economics, Business, and Accounting of the University of São Paulo (FEA/USP), from 2005 to 2007.

She was the Academic Coordinator of Executive Programs at Insper from 2006 to 2012 (working with Clariant, the Jewish Confederation of Brazil — CONIB, Grupo ABC, Nestlé, PepsiCo, Cargill, Banco Real, Santander, CPFL Energy, Toyota, J&J, Baxter, Orbitall, Bradesco Bank, AGF/Allianz, Einstein, Alpargatas, Ultra Group, Latapack-Ball). In the field of education, Prof. Claro served as a part-time professor at Fundação Getúlio Vargas’ São Paulo School of Business Administration – FGV/EAESP from 2013 to 2015 and as a professor of Executive Education Programs at FUNDACE-USP, Unisinos Jesuit University, Newton Paiva University Center, FIA – Fundação Instituto de Administração, FGV-PEC.