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“Better Business” was one of the issues proposed and most debated at this year's edition of the World Economic Forum held in the Swiss city of Davos. This definition of “better business” expands the assessment beyond a company's degree of competitiveness in the market and its financial performance. Business results must be generated in a context of social and environmental responsibility and governance. Companies must therefore have a constructive relationship with the environment and the lives of all those directly and indirectly involved with the business. business.

To demonstrate the importance of this issue, the Forum, which is celebrating its fiftieth anniversary this year, has drawn up a manifesto, the Davos Manifesto, which can be accessed here. here. These principles aim to give new meaning to capitalism in the era of the Fourth Industrial Revolution. The aim is to make it clear that the behavior of companies and countries (and their respective leaders) has a huge influence on people's lives.

The central question is: what kind of capitalism do we want? In the view of the World Economic Forum, two types should be avoided. So-called “shareholder capitalism”, which is based on maximizing profit for the shareholder, regardless of how. And “state capitalism”, which is based on a hegemonic presence of the government in the direction of the economy, a model used by China, its greatest exponent, as well as by some emerging countries.

In the Forum's view, it should promote a third way, which is already being adopted. This is “stakeholder capitalism”. This model, promoted by the Davos Manifesto, involves government, business and civil society. Companies that are harmoniously integrated into society pay fair taxes, show zero tolerance for corruption, have an appreciation for human rights in their operations, as well as in the operations of their suppliers, and work towards a competitive business environment - in which everyone competes on equal terms.

In this reality, economic inequalities - the differences in income between rich and poor - are smaller. According to a study by the International Monetary Fund (IMF) mentioned by one of the Forum's participants, IMF managing director Kristalina Georgieva, rising inequality was the cause that preceded all financial crises. At the moment, unfortunately, this is the scenario, with alarming inequality in many areas of the world. Furthermore, as I wrote in this article, The global economy is under pressure, with trade tensions between countries and geopolitical instability.

The President of the European Central Bank (ECB), Christine Lagarde, has called for climate risks to be part of the economic analysis carried out by the market. “We are no longer thinking in terms of 30-year risks, but in terms of much shorter timeframes. We need everyone's cooperation, even the rating agencies must take part in this process,” she said. What Christine wants is for companies to be analyzed according to the ESG evaluation method which I recently wrote about.

In Davos, still in relation to this new way of evaluating businesses, the talk was of the need to develop a metric that measures “stakeholder value creation”, in other words, the degree of reliability of a company. Apparently, three criteria will be among those adopted: the company being ethical, listening to its customers and being good to its employees.

How does Brazil fit into this new capitalism?

Environmental policies are important in attracting or scaring away investment. Although optimism dominated the World Economic Forum in relation to the Brazilian economy, the participants recognized that the environment is a factor of international concern.

Our Amazon rainforest can be an opportunity if the government prioritizes its conservation. Or it can scare off foreign investment if the environmental policies and actions of our governments harm the environment. In the new capitalism, the way we deal with the environment is one of the criteria used to assess the viability of investment - for both companies and countries.

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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor