communication world

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the magazine for communication management

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may–june 2010

SPECIALREPORT

LATINAMERICA

& THE CARIBBEAN

MOVING IN THE RIGHT

DIRECTION

As IABC celebrates its 40th year,we take a look at what lies ahead

www.iabc.com/cw

Communication World

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May–June 2010

CEMEX, a worldwide producerof cement, ready-mix and aggre-gates, has based its corporateresponsibility strategy on creat-ing sustainable value in the morethan 50 countries in which itoperates. Its success stems fromits goal to be the company of choice for each of its key stake-holders.

political transfor-mation is takingplace in Latin America. Ideolog-ical jousting andchanging doctrines have capi-talized on unresolved socialproblems, including gender dis-crimination, child labor andunfair labor practices, and envi-ronmental damage, as well asimproper corporate governance.In Venezuela, Argentina, Ecua-dor, Nicaragua, Bolivia, Braziland elsewhere, meeting thesechallenges has become the coreof government plans. That ischanging the relationshipbetween the state and the privatesector, often resulting inincreased auditing, regulationand intervention. For these rea-sons, and especially in light of the global recession, it’s not sur-prising that KPMG’s November2009 “Out of Adversity” reportnotes that 61 percent of organi-zations in Latin America say they are making substantialchanges to their short-termbusiness strategies, and 59 per-cent are radically rethinkingtheir long-term plans.In order for a country toevolve politically, social strugglesmust be treated not from an ide-ological standpoint, but ratherthrough a perspective in whichrevision of the social manage-ment of public and private cor-porations is a priority. There is akind of “social warming” takingplace in Latin America that isaffecting the sustainability andreputation of many companies.By “social warming” I meanpeople’s attitudes toward themany issues listed above: Thereis a new awareness among Latin Americans who are determinedto act in defense of their rights.These changes in attitudes aretaking place at an acceleratedpace as well, due to the increasedspeed at which news and infor-mation are communicated, inpart through social media. Infact, consumer demands arechanging much faster than mostcompanies can react, creatinga deep breach between a com-pany’s interest and society’sexpectations. This breach iseven greater among multi-national companies, becausemost try to respond to a specificgroup with global programs of social responsibility that arenot adapted to a particular loca-tion. All of these factors accen-tuate a lack of confidence inprivate enterprises. Accordingto Latinobarómetro 2009 (anannual public opinion survey of 19,000 people in 18 countries),only 42 percent of people havesome or a lot of confidence inprivate enterprises, rankingthem eighth among 15 institu-tions, demanding that corpo-rate leaders revise their models

A new sideto CSR

Latin American consumersare demanding an evolution—from corporate social responsibilityto socially responsible corporations

by Italo Pizzolante Negrón, Ph.D.

Communication World

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May–June 2010 www.iabc.com/cw

special report: latin america & the caribbean

of management and create ashared perspective toward cor-porate social responsibility.The United Nations GlobalCompact and the GlobalReporting Initiative have gener-ated a framework for companiesthat are committed to aligningtheir operations and strategies with important indicators anduniversally accepted principlesfor sustainable and responsiblebusinesses, including work-placestandards, environmentalresponsibility and anti-corrup-tion measures. Those that fail tomeet these standards, or to com-municate their progress towardmeeting them, are taken off the Global Compact’s list of participants; in fact, 859 com-panies worldwide were removedfrom the initiative in February because they failed to report ontheir progress.For example, fair trade initia-tives have become more than just a brand to promote moreequitable trading conditions.Rather, fair trade is a way toconnect concerned consumersand attentive producers in orderto combat poverty and guar-antee sustainable livelihoods.Though fair trade products aremore expensive, many con-sumers see additional value insupporting labor rights of banana producers in Peru, pro-tecting the environment forbeekeepers in Chile andempowering coffee co-opera-tives in Costa Rica, among otherissues. Consumers used to beinterested in a product; now they are also concerned aboutthe way it gets to the shelf.

New demands on CSR

Latin American consumers aredemanding an evolution fromcorporate social responsibility tosocially responsible corpora-tions, asking business leaders tounderstand CSR not as a way of “compensating” for a company’simpact but to create truly responsible business processes. A company can become a socially responsible corporation by syncing its business goals withthe expectations of society. Todo so, strategic communicationmust be used as an importantinstrument for institutionalstrengthening, guaranteeing thecoherence and consistency between what we say as a com-pany and what we do, insideand out. This way, corporationscan build perceptions that notonly inject more certainty intobusiness plans, but also facilitatethe accomplishment of the orga-nization’s goals.For those who are unaware of the dramatic cultural and polit-ical change that Latin Americansociety is undergoing, it’s impor-tant to understand that a com-pany’s performance today mustgo beyond economic factors toinclude new social and environ-mental dimensions. Today, moreimportant than producing achange of culture is creating aculture for change. Only a leader with creative energy and think-ing is capable of finding new approximations that guaranteebusiness sustainability and a new state of awareness that promotesthe challenge of a “social model”between company-society-gov-ernment, taking into considera-tion all interests at stake.Over the years, numerouspublications from qualifiedbusiness schools have invitedleaders to “adapt” themselves tonew realities and to the currentcompetitive market, in order totake advantage of new oppor-tunities. It is true that allcompanies wishing to survivecompetition must be fully com-petent and flexible in order toadapt; however, companies thatare successful in a sustainable way will only be those that movefurther and accept the challengeto model the environment in which they operate. Strategicand responsible communicationis the most important tool forproviding the necessary insti-tutional strengthening for allcompanies to build long-termrelationships based on trust.

“Building” trust

One example of building thiskind of trust comes fromCEMEX, a worldwide producerof cement, ready-mix and aggre-gates that has based its CSR strategy on creating sustainablevalue in the more than 50 coun-tries in which it operates. Aim-ing to be the company of choicefor each of its key stakeholders,CEMEX bases its strategy onthree main objectives:

1. Increasing competitiveness—

improving operational excel-lence and efficiency, and fol-lowing high ethical standardsto achieve long-term sustain-able growth

2. Reducing negative impact—

providing a safe, healthy workplace, as well as minimiz-ing the company’s environ-mental footprint

3. Reaching outto key stake-holders—

creating long-termrelationships with thesegroups to promote a sustain-able construction industry

In fact, consumerdemands are changingfaster than most compa-nies can react, in partdue to social media.

about the author

Italo Pizzolante Negrón, Ph.D.,has more than 30 years of expe-rience in strategic communica-tion. He founded the Venezuelanfirm PIZZOLANTE ComunicaciónEstratégica in 1976, and is cur-rently chairman of the board.