#EthicsMatter - Corporate Communication in the age of Moral Money
Growth demands communicating with everyone in the value chain and adopting the best social, environmental and governance practices.
The Brazilian Association for Business Communication (Aberje) dedicated 2020 to Nonviolent Communication (NVC), an approach created by North American psychologist Marshall Rosenberg with the objective of improving the way in which human beings relate to one another. NVC is based on the principle that “all violence is the tragic expression of a need that is not being met” and that all human needs are universal. The goal of NVC is to develop empathy through listening and connecting with others, and to use communication to create trust and resolve conflicts. This new approach is being adopted in situations where people need to coexist, including companies. In order to better understand what it means to create nonviolent work environments, Aberje carried out an unprecedented study in Brazil.
We investigated the degree to which certain NVC practices (observation, needs, feelings, etc.) were perceived within organizations. What was most interesting was that small companies scored higher than medium-sized ones, and medium higher than large companies. We also discovered that scores were higher on the team or in the department of the person responding to the survey than in the company as a whole. We interpreted this to mean that NVC elements are more easily observed on the micro scale (the team, the small company, those in close proximity) than the macro (leadership, large corporations, those who are in senior positions or distant to the daily activities of the company).
While engaging in NVC at the same time that we are going through a pandemic and social confinement seems to be a coincidence, it is obvious that a trauma like the one we are experiencing now requires prioritizing the feelings of others. And this is the focus of our research: feelings, our own, those of others, and those of the company and its stakeholders. It is as if some of the main considerations now are feelings and behavior, not just the spreadsheet. One of the necessary elements to increase GDP is for organizations, especially large ones, to learn to dialogue with people involved in their value chain. It is important that they identify fears, needs and desires in an effort to create interactions that are beneficial to all concerned.
The point we would like to emphasize is that this is not an isolated or passing trend, but rather a gradual process of profound change in the way business is being conducted. This approach is also evident in global financial markets with the adoption of ESG criteria by large institutional investors. Contrary to Milton Friedman’s doctrine that “the sole social responsibility of business is to increase its profits,” the shareholders' concerns today also include the environment, social issues and good governance. This agenda is not driven by social movements, universities, NGOs, etc., but by the largest investment firms in the world who are demanding decarbonization plans, inclusion policies, adherence to regulatory policies and adoption of best practices.
We believe that corporate communication as well as companies and their actions should pay more attention to what the Financial Times is calling “Moral Money” (ethical capital), and to which it has dedicated a newsletter. The thesis is simple, not unprecedented, but in any case revolutionary: The notion that it is acceptable to pursue profits by any means is no longer tenable. On the contrary, the means and the process have also become decisive factors. The environment, social issues and governance have gained increasing importance with regards to society and even the environment.
It is obvious why these concerns are relevant. Although the earth would survive without us, human life would disappear if we do not preserve the environment. Pervasive inequality causes a decrease in opportunities and productivity, and an increase in social unrest. The “S” in ESG refers to “social,” but it also has to do with human sentiments and feelings. And finally, good governance is needed to prevent the misuse of money, not only by companies but by government as well.
For a long time, capitalism was seen as being morally neutral. Leaders sought out profits and it was the State’s job to regulate them to be less predatory, or at least be as fair as possible. The idea of Moral Money implies that finance itself must internalize a concern for ethical behavior. Younger people may not know “Gerson’s law,” which involved a successful soccer player whose reputation was ruined after appearing in a cigarette advertisement saying, “I want to get the advantage in everything I do.” With Moral Money, the goal is the opposite. It should not be about taking advantage of the other, but rather for everyone, from the company's employees to its users and consumers, to benefit from each other in a sustainable relationship. Here, it is possible to see a connection between Moral Money and the NVC objective of open and mutually enriching communication.
Capitalism has been and still is extremely effective in promoting economic development. What Moral Money proposes, and what we are beginning to see with the adoption of the ESG agenda by the largest institutional investors, is that ethical standards are being internalized by capitalism; that wealth, far from being neutral (or, worse, destructive), has taken on a moral posture. This signifies a series of commitments, some of which can be found in the Brazilian Constitution. In 1988 the framers affirmed that one of the goals of the Republic was to eradicate poverty. In the years since we have also increased the effort to balance human life with other forms of life on the planet? We know that each calendar year humanity spends almost two years of environmental resources. We are not living off income, but spending, if the metaphor allows us, the principal. Any business owner knows this is a recipe for bankruptcy. Are we going to let human life fail?
These questions become more relevant in Brazil as falling interest rates will intensify the migration of money to stock markets, where ESG and Moral Money have even more influence on investors’ choices. It is clear that with the deforestation in the Amazon, neither national nor global companies want to be associated with environmental destruction. This indicates not only a change in the narrative, but also in posture and attitude.*
Hamilton dos Santos is a journalist, general director of Aberje, and holds a Master’s degree and PhD in Philosophy from USP.
Paulo Nassar is president of Aberje, professor at ECA-USP and coordinator of the New Narratives Study Group (GENN ECA-USP).
* This is the agenda that Aberje, in partnership with the Brazilian Association of Financial and Capital Markets Entities (Anbima), will carry out through research initiatives like the 2021 study of Communication in Brazilian Financial and Capital Markets, which will be published in July.
This article is an adaptation of the text originally published in Valor Setorial Corporate Communication 2020 magazine of Valor Econômico, Brazil's leading business and economy newspaper.
Any thoughts or opinions expressed are that of the author and not of Global Alliance.