By Mario Osava
RIO DE JANEIRO, Feb 23 2007 (IPS)

At 62, engineer Oded Grajew, born in Israel but a naturalised Brazilian, is an icon of the progressive business sector who has revolutionised the behaviour of his fellow entrepreneurs.

He heads the deliberative council of the Ethos Institute of Business and Social Responsibility, which he founded in 1998 and whose "management tools" – indicators and guidelines – serve a network of 18 similar organisations in Latin America.

Former partner in a toy manufacturing company, he led several national initiatives since the 1980s, like the PNBE (National Thought of the Entrepreneurial Bases), the Abrinq Foundation for the Rights of Children and Adolescents, initially linked to the Brazilian Association of Toy Manufacturers (Abrinq), the Association of Entrepreneurs for the Citizenry and the Ethos Institute. He was also founder of the World Social Forum.

Tierramérica spoke by telephone with Grajew, who was in Sao Paulo at the time.

TIERRAMÉRICA: Is social responsibility just a manoeuvre by businesses to profit more?

GRAJEW: No, it&#39s necessary to comply with it fully in order to obtain its benefits. If a company promotes a bad product, in a short time it loses its credibility and the dedication of its employees. Social responsibility entered the logic of companies and the market due to pressure from society, non-governmental organisations and trade unions. The statistics show the correspondence between social responsibility and profits. Furthermore, it&#39s more work to cover up poor management and the inherent risk. And if it comes out, it&#39s explosive. There are examples, like Enron in the United States and Parmalat in Brazil.

GRAJEW: Globalisation increases those pressures, but everything is globalising, not just the economy: information, human rights, social networks. Cases like Nike are emblematic, where they discovered child labour exploited by its suppliers in Asia. The information was disseminated globally, there was rejection of Nike shoes, and its stock market prices fell. Globalisation facilitated the public reaction. Curbing rights also causes reactions, imposing limits. Danone in France and Ford in Brazil had to reverse their massive layoffs, after boycotts of their products. This is the same for trade unions, NGOs, government and political parties.

TIERRAMÉRICA: Where does corporate social responsibility stand when it comes to global warming?

GRAJEW: Climate change puts everything in check. It requires urgent rethinking of many things: the energy matrix, consumption limits, poverty, inequality, lifestyle habits. Social responsibility also takes into account the impact on future generations.

TIERRAMÉRICA: Would it be possible, for example, to do something for climate change, similar to the campaign you promoted in Brazil against child labour, in which companies would commit not to buy inputs from those who are not working to reduce greenhouse gas emissions or who deforest the Amazon?

GRAJEW: Certainly. For example, Ethos, Greenpeace and the leading European consumer groups pressured the McDonald&#39s restaurant chain, and convinced the company and its suppliers – the transnationals Cargill and Bunge – to pledge not to use soy produced from illegal deforestation of the Amazon. Today there are Brazilian cities that have legislation banning the purchase of non-certified (unsustainable) lumber for use in public contracts.

TIERRAMÉRICA: Do environmental standards pose obstacles to companies, or do they represent business opportunities?

GRAJEW: Sustainable development is intended for future generations to live better. It&#39s foolish to say that environmental standards get in the way of economic growth; it depends on what kind of growth you want. Brazil grew a lot in the 20th century, but creating an extremely unequal society. Unsustainable development expands the physical infrastructure but exhausts the environment. In contrast, sustainable development generates new business and jobs, as occurs with solar and wind energy and biofuels.

TIERRAMÉRICA: What do you hope from the second term of Brazil&#39s President Luiz Inácio Lula da Silva?

GRAJEW: That it will consolidate institutions that ensure a more just society without relying on the good will of the government. Lula&#39s first term benefited the poor, generated formal employment and social participation, but it&#39s institutionally fragile. His successor could change the path. It&#39s essential to have reforms in order to recover the credibility of politics, reduce the influence of economic power in the elections and fight corruption. And a tax reform is needed to create a more just system in which the poor pay lower taxes.

(*Originally published by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme and the United Nations Environment Programme.)

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