Change is not easy. Whether personal or professional, change entails leaving your comfort zone and exposing yourself to new situations in which the learning experience can be beneficial. New situations require new solutions. They challenge us and put us to the test. And this is what we experience when we talk about sustainability. We are living in a changing world.

If we imagine this is not the case, we had better look again. The world is moving from shareholder value to stakeholder value; from a single bottom line to the triple bottom line; from the idea that natural resources are infinite to the realisation that not only are they finite, but they are becoming more valuable every day; from consumerism as a synonym for status, to collective purchasing and collaborative consumption; and finally, from economic risk to economic and socio-environmental risk. It is a new world. And all of us – corporations, governments, countries, and individuals – are seeking the best way to comprehend what is taking place and to position ourselves in light of this new reality.

Recognition of the relevance of ESG (social, environmental and governance) factors in day-to-day business operations is part of this context. On the one hand, more proof is needed about financial return linked to these factors, so that analysts, fund managers and investors can review their concepts and positions and begin to see these components in a less marginal manner, and as more than just another niche. On the other hand, there is an abundance of quantitative data that cannot be ignored, and entire business segments that are being obliged to reinvent themselves in the face of the reality of global warming and environmental calamities.

Insurance
The insurance sector is a good example of this. Disaster claims paid by insurers in 2010 totaled $43bn, which was 60 percent more than the $27bn they paid in 2009. In Japan, the Fukushima tragedy alone has generated around $35bn in damages, becoming the second most expensive catastrophe for the insurance industry after Hurricane Katrina ($46bn), according to the catastrophe risk assessment company AIR Worldwide. Clearly it is impossible to manage insurance companies today in the same way they were managed just two decades ago, and this same rationale can be extrapolated to individual countries and to whole continents.

Brazil is considered to have the greatest biodiversity of any country on the planet, and one of the world’s cleanest energy matrices. It also has an enormous responsibility. The Brazilian corporate sector has demonstrated its concern by taking a leading role in these matters. Thus, among the emerging markets Brazil has the largest number of financial institutions that are signatories of the Equator Principles. It is also the emerging nation that issues the largest number of sustainability reports based on the GRI model. Finally, Brazil has the world’s fourth largest network of companies that are signatories of the UN Global Compact.

All of this mobilization and commitment will be deployed to an unprecedented extent next year, at one of the most important events on the global sustainability agenda: Rio + 20. This will take place in Rio de Janeiro in June of 2012, twenty years after ECO 92 – the most important global environmental conference ever held. At Rio + 20 the accomplishments of the last twenty years will be evaluated and the focus will be on two issues: the green economy in the context of the eradication of poverty, and global governance for sustainable development. We are talking here about a new level of human development. To return to the beginning of this article we are talking about change, which is no simple matter. It is nonetheless imperative and unavoidable.
I often say that the sustainability at the core of this new world order is incorporated by a company, individual, manager or investor in one of three ways: love, pain, or intelligence.

It happens through love when the principal involved – in the case of a company, the CEO or the chairman of the Board of Directors – is convinced of the need to adopt this agenda, and then makes it happen. It occurs through pain when the company has to face the path of financial or reputational losses. And it comes about through intelligence with the full perception of the competitive advantage, opportunity for differentiation and chance to occupy new spaces afforded by this agenda.

Stock exchanges, which are the heart of the capital markets, have an important role to play in the awareness, promotion, and implementation of best corporate practices. And when it comes to sustainability, the world’s fourth largest exchange in market value, BM&FBOVESPA, not only has a specific office to address this matter, but also creates related products such as sustainability indexes. It also fosters the carbon market and interacts with all of its stakeholders and participates in most of the main international forums (PRI, GRI, CDP, Global Compact). All of this happens because we believe it is the intelligent path to address this manifold agenda with seriousness, commitment and consequence. Our sustainability initiatives are organized and communicated through a specialized institutional program entitled “Novo Valor”. We propose a new value for a new world. As soon as possible.

Sonia Favaretto is BM&FBOVESPA’s Sustainability Officer