Navigating New Terrain in Emerging Markets: Brazil, China, and India

September 24, 2012

Joe Sellwood, Director, South America, BSR

The focus of the recent BSR and UN Global Compact LEAD study, “The New Geographies of Sustainability,” sought to answer the question of whether there should be a separate approach to corporate sustainability in "emerging markets." The answer is most definitely yes. The course and terrain companies must navigate in Brazil, India, and China are different from the challenges companies struggle with in developed economies.

Companies in Brazil, in particular, face a fundamentally distinct landscape than what their U.S. or European counterparts navigated in the early days of sustainability:

  • Brazilian companies have focused on addressing immediate sustainability challenges within their own operations, working with government and organizations on a case-by-case basis.   
  • While Brazilian regulation is rigorous, piecemeal enforcement pushes companies to take a fragmented approach. 
  • The connotation of corruption through company involvement in policy or “lobbying” has impeded advocacy for smart policy approaches. 
  • Perhaps due to shortcomings of the political process, actors in Brazil aspire to collaborate with NGOs and financial insitutions in developing solutions. 
  • Including government actors in sustainability efforts has been slow to start but widely recognized a necessary next step.
  • Increased collaboration within sectors is key in focusing efforts on solutions, many of which go beyond the fence of individual operations.

The New Geographies of Sustainability report points out to two important commonalities among the Brazil, India, and China that will shape sustainability efforts to come:

  • Direction dictated by national agendas: Companies naturally focus on approval and legitimacy from their domestic actors (where they have the greatest exposure). Given pressure to fill the gap in development, the BICs tend to concentrate on national priorities with a still incipient awareness of global concerns.
  • Development focused sustainability: The social deficit in Brazil weighs heavily on expectations of companies as agents of progress. The common challenge among the emerging markets is to find ways to utilize the mass population as productive agents of change to and include them in the benefits. Development focus has meant corporate paternalism in the past, but needs to mean solutions-oriented in the future.

Growth and thereby change will be accelerated in Brazil, India, and China in the decade to come. We must advance sustainability performance in these geographies to successfully address global challenges. Furthermore, the Brazil to China commercial corridor will become increasingly important for addressing impacts. For example, from January to November 2011, Brazil sold US$18.2 billion in minerals and US$10.5 billion in soy to China, representing an increase of 55 percent and 47 percent respectively over the previous year.  

Given a common agenda of development with social inclusion as well as similar sustainability challenges, BSR sees opportunity to cultivate collaboration among the Brazil and China in a common direction. Together with Instituto Ethos, BSR is launching a new research project that includes a spectrum of value chain actors for key commodities and aims to understand how sustainability guidelines better deliver development and commercial interests. Through an aligned understanding of the issues most impacting Brazilian suppliers and the connection to long-term interests of Chinese buyers, we focus efforts on solutions among Brazilian and Chinese actors. The future of sustainability will include collaboration within each emerging market and, most importantly, among them. 

Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals.

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