Beyond compliance with regulations, the major challenge of sustainability for companies lies in effectively explaining their contribution to the societies in which they operate. Our Director of Reputation, Sustainability, and CSR, Manuel Sevillano Bueno, is interviewed by the Galician media El Correo Gallego, addressing issues of sustainability and sustainable strategies.
In addition to a technical and regulatory aspect, you focus on the need for companies to effectively communicate their commitment to sustainability. How can ATREVIA help with this?
Sustainability has a technical aspect that, by conviction or obligation, you will have to comply with. But the challenge is to have your stakeholders recognize it. Otherwise, you might end up like Van Gogh, whom we all recognize as a great painter, but only after he died because while he was alive, he didn’t sell any artwork. ATREVIA tries to work in that area, on how to achieve recognition from stakeholders. And that is achieved based on two things: how you manage the fulfillment of your commitments and the management of expectations. Lately, managing expectations has been gaining more prominence.
Can you give an example?
Historical companies that have been fulfilling their commitments for many years are suffering in the stock market, the clearest case being Telefónica, compared to others that manage expectations very well and seem to have more future, like Tesla. If you look at the numbers, Tesla sells few cars, has a decent profit, but it is one of the most valued companies in the world by market capitalization because it is believed that the future belongs to Tesla and not to traditional companies like Volkswagen or Toyota, which are worth much less in the stock market despite having much higher profits. That’s where we operate at ATREVIA, aligning stakeholders’ expectations with corporate behaviors.
Do you think the path to sustainability is irreversible, or are the rural mobilizations across the EU exposing existing risks?
There are dangers. Farmers are complaining that it is increasingly difficult for them to comply with regulations. In the United States, there are debates about whether sustainability generates a lot more bureaucracy and difficulties in competing. I want to be optimistic. I believe it is an irreversible path because, ultimately, it’s just thinking in the medium term, not just in the short term. Companies have to think not only about today’s profits but also about tomorrow’s. In that sense, I believe there is no turning back.
But how do you explain to farmers that they have to compete against countries that do not follow the same rules and can sell their products at lower prices?
The question is how to compete against that and also how to get the consumer to pay for that because the consumer is not willing to pay much more just because something is sustainable, or not in all areas at least. Europe took up the banner of sustainability to mark its role in the world and to tell the world that we have a model of life in mind, a social and rule-of-law State, and this is our proposal. Indeed, in Europe, we are strong, it is a very large market that has the capacity to mobilize companies, but of course, there are dangers. Europe has to compete in a globalized world where there are areas with more lax behaviors. Sustainability must have a long-term view, not just very short-term and short-sighted aspects. Europe plays its role with very ambitious regulations that force companies to meet requirements that may make them less competitive in the short term, but I believe that in the medium term, it makes them more competitive and more sustainable.
How do you see Galicia positioned in the sustainability race?
Galicia has some flagship companies that are global benchmarks in sustainability. The one we all have in mind is Inditex, but there are also major players in the economy like Estrella Galicia, which within its area of influence is leading all suppliers, distributors to embark on a path of sustainability. In addition, there are other initiatives such as the Green Port of the Port of A Coruña or of medium or small companies. The commitment to sustainability is unequivocal. In Galicia, there is an awareness of the social and environmental impact that companies have, and I think the race is quite advanced. Having companies at a global level means they have the capacity to mobilize many resources and behaviors.
The impact of what is referred to as regulatory tsunami keeps all companies on alert due to growing sustainability concerns. What do they mean by that?
The regulatory tsunami is the big wave of regulation that is coming. Rarely a day or week goes by without some regulation affecting one sector of the economy or another. And that has companies very concerned. The danger of this is that sustainability ends up becoming an accounting issue or purely compliance-based. I believe that sustainability lacks poetry. Companies need a sustainability narrative that values what they are doing for different stakeholders. Because without recognition, this movement is hobbling. It is true that there is now a lot of regulation that has everyone worried because it needs to be digested, but we cannot lose sight of the fact that this is done to add value to the societies where we operate. And this has to do with recognition, with explaining well how you contribute to the communities where you operate.
In any case, do sustainable strategies have a tangible impact on companies’ bottom lines?
The basis of all sustainability is economic. Companies are there to make money, or else they are not sustainable. Does that mean they have to do everything in the short term? No. Sustainability is managed well in the medium term. It has to be a commitment not so much to ensure today’s profits but those of tomorrow, the day after tomorrow, and ten years from now. That is the key. Sometimes investments are made that in the short term may penalize the bottom line, but then you expect a return.
You worked in Galicia on the development of the Green Port project of the Port of A Coruña. What does it consist of?
Green Port is a project of which we are especially proud because it is a model of corporate citizenship at the Port of A Coruña. It is a model for defining how the port relates to its stakeholders and establishes a methodology. It wants stakeholders to be part of the day-to-day of the Port of A Coruña. It wants to open up to the community, to the city, and make them participate in its achievements, its problems, its risks. It is a project that is a precursor in management models, at least in Ports of the State. I don’t know of any other similar initiative.
