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A HORSE BACKED FOR RH....AND IT HAS A NAME: ESG


esg rh

Salvador Evangelista – Senior Partner at DMS PARTNERS


ENCILHATED HORSE – THE ORIGIN AND MEANING OF THE EXPRESSION



This Gaucho saying is reasonably well known: A saddled horse doesn't go in front of you twice.


The implicit message: If the saddled horse passes in front of you, mount it and continue on the journey.


If you don't do it, someone else will.


Great opportunities don't always come along. If one appears to you, grab it or you will regret not having done so.


THE ESG MOVEMENT


The acronym, in English, includes the E for Environmental, the S for Social and the G for


Governance. Together, the letters identify the movement aimed at, in short, ensuring that companies explicitly make a commitment to serving society. This movement has gained increasing visibility, in Brazil and around the world.


IN THE SAME DIRECTION, CAPITALISM FOR STAKEHOLDERS


In a classic article published in 1970, Milton Friedman, Nobel Prize winner in Economics in 1976, defended the thesis that “the social responsibility of companies is to increase profits”, a thought that influenced the business agenda, especially in the USA, for decades. In essence, capitalism for shareholders.


In August 2019, the Business Roundtable, a business organization that brings together approximately 200 leading companies in the USA, buried this pro-shareholder vision and embraced the commitment to the search for results that meet the aspirations of all Stakeholders, that is, all parties involved in the business ecosystem: employees, customers, partners, the community and shareholders. This is called Capitalism for Stakeholders.


ESG, CAPITALISM FOR STAKEHOLDERS: SPECIES OF THE GENRE “THE COMPANY MUST SERVE SOCIETY”


The new political-social context in the Western world is characterized by extremely relevant changes. Examples:


The search of new generations for greater meaning in work;


The appreciation of Purpose as a driver of the destiny of an individual or a


Sustainability as an irreversible component of business management;


The cry of citizens, consumers and investors for ethics and transparency in public or private management;


The growing sense that the current practices of capitalism are widening social and economic inequalities.


The principles adopted by the ESG and Stakeholder Capitalism movements represent historic advances that seek to respond to societal concerns. However, in much of the Western world, where they have a more solid prospect of becoming a reality, there is a long way to go before they are incorporated into the business world. But there are already relevant additions, including in Brazil, from companies recognized and admired for having chosen this journey.


The two movements were already growing stronger in the pre-pandemic world and the global health crisis only revealed the need for companies to take on a relevant role in addressing issues that affect society as a whole.


RHs FROM BRAZIL: BELIEVE ME, THIS BACKED HORSE IS PASSING BY YOUR WINDOW


Both ESG and Stakeholder Capitalism will only become reality if they are part of the company's DNA. Press releases or elegant phrases in reports on environmental or social successes will not stand the test of time until the soul of the company has incorporated the principles of these movements.


If the concept that the company should serve society has to be in its DNA, then it is an element of the internal culture, it is a pillar of Organizational Identity, which expresses the company's convictions about purpose, values and vision. This subject falls within the field of HR.


In fact, this is the most important job in the HR area: leading the internal process for building, communicating and institutionalizing Organizational Identity.


A RISK JOURNEY FOR HR LEADERS


This change is profound and the arguments against it are the usual suspects: No one is going in this direction, why should we? Our results have been so good, why change a team that is winning? Isn't this just another fad?


The context requires a lot of technical competence and political skill from HR to articulate the


argument for change and convince the organization that this is the way forward. It is not simply changing an internal People Management process. It's changing the nature of the company. The context demands a statesmanlike attitude from HR, it demands courage.


Let us remember this phrase, attributed to Winston Churchill, one of the greatest statesmen in history: “Courage is the first virtue of the statesman; without it, all other virtues disappear in times of danger.”


THE ROLE OF HR IN THE PANDEMIC… AND IN HISTORY


Companies are no longer just economic and social institutions. Today they are also political institutions, which implies assuming the right and duty to get involved in issues that affect society.


The ESG and Stakeholder Capitalism movements are irreversible and will change

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