How to create competitive businesses with socio-environmental responsibility

competitive business

Planning and simultaneous intervention in the chain are part of the secret to the success of the projects

All over the world, we've seen it emerge business models that seek to break with the traditional way of operating in the market and show that it is possible to generate income and work, prioritizing people and the environment. Agricultural production in agroforestry, fishermen's cooperatives that live from sustainable fishing and clothing manufacturers that value fair and ecological work and trade relations are just some of the forms these businesses can take.

That type of enterprise arises in response to a demand for solutions in a world marked by inequality, human rights violations and an environmental crisis of which climate change and the loss of biodiversity are just some of its symptoms. 

The market challenges

To implement these projects, it is necessary to combine sustainability and social justice with a practical vision capable of meeting the needs of the market. And that's not easy. The challenge is even greater when we talk about businesses developed by communities with little access to economic resources and social services.

The first step in overcoming this problem is to understand what obstacles must be overcome. The biggest one is perhaps the lack of infrastructure and basic services such as health, education and sanitation that many places face, because without a base, development becomes more difficult and takes longer.

In precarious conditions, income opportunities are scarce, and even when a way is found to develop a product, getting it to consumers is another story. For the consultant of the Interelos Institute, Wagner D'Onofrio, this is an issue faced by many enterprises. “There is a huge logistical challenge in the Amazon, especially with regard to structuring businesses and transporting products to the consumer center,” he says.

In addition to the lack of buyers, the absence of roads, airports and other necessary infrastructure makes access to other markets difficult. In D'Onofrio's words, “The greater the precariousness of access, the greater the logistical challenge”. 

Educational deficiencies, on the other hand, impede the development of territories in the long term. Education is essential for training qualified labor and fostering critical thinking among community residents. Another challenge is to create business models capable of bringing adequate income and adding value to the region. Acquiring the necessary scale to be able to compete in the market is a big challenge. As well as guaranteeing quality of life with the sale of primary products, as it is not simple to produce goods with added value. 

In addition, every business requires investments for its viability and operation. “It takes investment in land, equipment and, at the beginning of the operation, for working capital. Without investment, there is no progress”, explains D'Onofrio. 

The development of enterprises and territories needs a constant flow of capital and planning capable of enabling deeper and lasting changes. Acquiring scale is another challenge that is not easy to overcome. “You need to have great processing capacity, industrial capacity. It is necessary to produce on a large scale and we are talking about managing an industry, it is not a simple task”. 

Unlocking value chains

Although it is not easy, it is possible to overcome these obstacles with a strategy and planning focused on the short, medium and long term. For that, it is necessary to think about the mentioned issues and act in all the links of the productive chains.

It is important to think about how the socio-environmental benefits of this type of business can be used in favor of its structuring. For D'Onofrio, “putting social and environmental benefits into the product is a solution to add even more value”. For him, many consumers will value this aspect and, if necessary, pay more for this production, which represents an opportunity. 

But before that, it is necessary to know if there is a market interested in what the company proposes to sell. “Firstly, you need to do a lot of market research to see if consumers are willing to pay for a product with these qualities, and then if there is in fact a consumer market that is big enough,” explains D'Onofrio.

For him, placing socio-environmental assets in the business chain of an industry is also a way of attracting investments from other companies and organizations, which allows for its structuring and viability.

And when we talk about social benefits, it is important to think about how they can be implemented not only in the products but in the very structure of the business developed. According to D'Onofrio, cooperativism is one way to achieve this, especially in community-based projects.

“Cooperativism is a tool that avoids the concentration of income, because the profit, when it arrives, is distributed to everyone”, he explains. In addition, he emphasizes that “in a cooperative, the community is the protagonist of the enterprise, because they are the ones who make the decisions”. This protagonism is a key part of the development of territories by ensuring that the needs and priorities of their populations are reflected in their undertakings. 

With the business structured and with working capital, it is necessary to gain scale and generate value-added products as a way of increasing income and employment opportunities. This involves dealing with logistics issues that permeate the entire production chain. 

Acquiring industrial capacity is another important step towards transforming raw materials into higher value products and also towards gaining scale. But putting an industry on its feet and managing it is not the simplest of tasks. D'Onofrio highlights the importance of the ability to manage and plan:

“It is necessary to have a large production of raw materials and coordination of the different processes. This involves organizing the entire base of producers to produce in large quantities and deliver on the correct date and in the correct way”, he says.

All of this is not built overnight. It is a long-term process that requires investment in logistics, management and innovation, but also in people. This is the only investment that will make the development of territories possible in the long term. Investing in people.

Education is the best fruit

For Aldemir Corrêa, vice-president of the Management Committee of the Community Protocol of Beira Amazonas and member of the deliberative council of the Cooperativa Agroextrativista dos Produtores do Bailique and Beira Amazonas (amazonbai), in the state of Amapá, education is the key to success. 

A resident of the region, he trained as a technician in agro-extractivism at the Escola Família Agroextrativista do Carvão, specializing in cooperative management at the Escola Superior de Cooperativism in Porto Alegre. This training was valuable for his performance in the amazonbai, which produces açaí through sustainable management techniques and today has an agro-industry that sells part of its production to São Paulo.

For him, “the success of any enterprise depends on science and technology, and for that it is necessary to have training and knowledge”. It is this knowledge, says Corrêa, “that makes it possible to improve the processes of shared and democratic management, with transparency and responsibility”.

It is only possible to structure a successful venture if this business has people capable of carrying out simultaneous interventions in the production chain and coordinated actions. He also emphasizes that interventions need to take place “both with regard to sustainable management and the management of the company and its technical and operational part”.

It is necessary to have qualified labor to manage this type of operation, from the production of raw material to the flow of goods already processed by the industry to the consumer market, as well as to identify possible bottlenecks, improve logistics and seek new markets, among other functions. 

If all this depends on cultural capital, says Corrêa, “then education is the soul of this business”. Furthermore, it is necessary to think about what kind of education should be promoted according to regional needs. “It (education) needs to dialogue with the territory, the production chain, environmental awareness and local knowledge”, he explains. 

if the amazonbai got where it is, this is largely due to the work developed by the Rural Family Schools in the region, such as the one that formed Corrêa. These schools are based on alternating pedagogy, in which students alternate between periods when they stay in their communities and periods in schools, where they also learn knowledge that can be applied where they live as agro-extractive techniques.

“This training provided communities with the possibility of looking at the potential of the forest in a different way, in a way that is not just the exploitation of capital”, he says. “We now have a responsibility to use these resources sustainably so that they remain a source of income for generations to come.” 

Today, the residents of the region reap the fruits of their education and work in the amazonbai, and show that, with proper planning and long-term investment in education, it is possible to structure successful ventures in which sustainability and the development of territories go hand in hand.

Related Posts