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BRAZIL: Green-Friendly Image Yields Dividends for Business

Fabiana Frayssinet

BELO HORIZONTE, Brazil, Oct 19 2007 (IPS) - One company is offering reforestation services for areas damaged by soil erosion, another advises factories on how to become carbon neutral, and a third offers environmental laboratory services to assess ecological damage. This new generation of business values the “eco-efficient lifestyle.”

These companies have stands at the Environmental Technology Fair being held from Tuesday to Friday in the southeastern Brazilian city of Belo Horizonte, in conjunction with the Seventh Latin American Conference on the Environment and Social Responsibility, organised by the Ecolatina consultancy to discuss ways to combat climate change in the region.

Ronaldo Gusmao, coordinator of the Ecolatina conference, told IPS that when the initiative emerged in 1998, in response to suggestions made at the 1992 Earth Summit, “environmental issues were regarded as the remit of politicians and environmental activists,” while society at large and the private sector were apathetic.

“At that time, talking to the business community about environmental or social responsibility was like using bad language,” he recalled. Today, however, the situation has changed, and serious attempts are being made to curb climate change in the region.

After a decade during which companies “began to react, but merely to avoid breaking the new environmental laws,” they realised that society, too, was beginning to demand that they become more active on conservation matters.

“Previously, companies might have had environmental licences, but these had not been issued by society,” was his brief summary of the situation.

Other factors also had a bearing on this growing awareness, according to the coordinator of Ecolatina which, in addition to the fair, offered courses, seminars and workshops this week for small and medium-sized companies on the challenges and opportunities of sustainable development and the administration of environmental resources.

Gusmao mentioned the Stern Review on the Economics of Climate Change by British economist Nicholas Stern, who in January predicted that in the new world of climate change, companies will face ever stricter environmental regulations, and will need to use technology to reduce greenhouse gas emissions and modify consumer habits.

The report also said that increased awareness among consumers will help prompt responses from governments.

An example of that was a decision by Brazilian Environment Minister Marina Silva to make available information to consumers about which makes and types of cars emit fewest toxic gases, as already occurs in the United States.

In Sao Paulo, Brazil’s largest city with a population of 19 million, there is already one car for every two people.

“Companies are going through a paradigm shift,” Gusmao stressed. “Just as the Industrial Revolution in the past ushered in a new paradigm for production, today’s new paradigm is the Industrial Counterrevolution,” he said.

Gusmao gave the example of the river basin committees, formed by riverside dwellers and companies to protect water courses in conjunction with representatives of state or municipal governments.

When a given problem affects the river environment, such as pollution from a factory’s effluent, drought, or domestic garbage disposal by local residents, the committee meets, draws up a plan of action and executes it.

In the state of Minas Gerais – where Belo Horizonte is located – alone there are 32 river basin committees.

“Companies are beginning to realise that water, a precious input that they use, is becoming scarce,” said Gusmao. He cited the case of the Kaiser beer company, which forms part of the Piracicaba River Basin Committee in Sao Paulo because it is aware that if the river dries up or is polluted, it will lose its chief raw material, water.

In an interview with IPS, Paulo Alvim, environment manager for the Brazilian Micro and Small Business Support Service (SEBRAE), said that businesses “are realising they must transform environmental legislation, which they used to see as a problem, into an opportunity.”

From a business point of view, “a good record on the environment is a valuable marketing strategy, because the demand for eco-friendly products and services from consumers is steadily growing,” said Alvim.

As an example of the sort of “differential marketing” SEBRAE recommends to small and medium-sized businesses, Alvim mentioned a restaurant which now welcomes customers into its kitchen to see the work done there, doesn’t leave rubbish outside the door, and provides a “sopao” (thick soup or stew) to a needy community nearby, made out of the day’s leftovers.

“A company’s image is part of its marketing strategy,” said Alvim, adding that if the government provided more tax incentives or credit to make companies more eco-friendly, “the trend towards sustainable production and consumption would be even more marked.”

The increasing concern in this area is reflected by the number of companies providing environmental technologies and services. This year there are 79 stands at the Ecolatina fair.

One of them is occupied by Sao Paulo laboratory Ecolabor, which specialises in analyses of soil, water, sludge and waste for companies or individuals on request, its spokesman, Luiz Augusto S. Junior, told IPS.

Ecolabor says that its clientele has expanded since the leftwing Luiz Inácio Lula da Silva administration toughened environmental regulations. For instance, it was hired by a company in the northern state of Pará because fisherfolk were complaining that effluent from the firm was killing the fish.

The laboratory discovered that what was really poisoning the fish was a type of bamboo which released toxins when the fisherfolk twisted it in the water. “Once the source of the problem had been found, the company and the fisherfolk settled their differences,” Junior said.

A similar case is that of Oksigeno, a company in Minas Gerais that advises firms on how to neutralise their carbon emissions.

Once the diagnosis is arrived at, “if there is no way to reduce emissions, we advise firms to compensate for the negative impact by reforestation,” Itamar Melgaco of Oksigeno told IPS.

Deflor is another company specialising in environmental services. Luciana de Oliveira Matos, its environmental consultant, says it has an enormous client list, including big mining companies in the Latin American region, which contract it to reforest areas of soil erosion caused by extractive activities.

Deflor’s forest restoration services range from initial assessment to cultivation of plant species. It uses special technology, consisting of mats of biodegradable fibres such as coconut and agricultural straw, which help reforestation by retaining water, preventing landslides on eroded slopes, and providing extra nutrients to the soil.

Some large corporations like Fiat Automobiles also have stands at the Ecolatina fair.

At its plant in Betím, Minas Gerais, Fiat has an environmental technology research centre which recycles 93 percent of its waste products, and is currently making a prototype of a “carbon neutral” car.

“Sustainable Development: Opportunities and Challenges for Micro and Small Companies” was the theme of the Ecolatina seminar coordinated by Beatriz Bulhoes, the head of the Brazilian Business Council for Sustainable Development (CEBDS).

Between 1999 and 2004, companies advised by CEBDS have invested 6.3 million reals (3.4 million dollars) in improvements to their installations for environmental reasons, and they have saved 23.6 million reals (12.8 million dollars) in costs, Bulhoes said.

The principle that CEBDS calls “eco-efficiency” is based on the concept of “producing more, and of higher quality, with less.” And in addition to the intangible benefits such as reputation, brand-name recognition, ethics and corporate transparency, it appears to be a smart way of producing tangible benefits too.