Material corporate social responsibility

Corporate and social responsibility (CSR) has become one of the most important topics for businesses in recent years and it is no different in Latin America. Consumers in the region care about corporate practice. Therefore, a business’ treatment of its employees and other stakeholders, its carbon footprint, its investment in social and environmental projects, and its stance against corruption all directly impact brand reputation.

Latin American governments are at very different stages when it comes to requirements around CSR and ESG (environmental, social and governance) reporting, which can be incorporated into the same sustainability report. 

CSR reports explain a company’s ethics behind their business practice in relation to its stakeholders and the broader community in which it operates. It identifies the social and environmental programmes, philanthropy, donations and community projects in which the company is involved.  

Meanwhile, ESG reports identify how the three pillars of environment, social and governance are incorporated into the core purpose of the company, accompanied by concrete targets that are often aligned with international standards.

In Brazil, sustainability reporting is voluntary but is set to become mandatory in 2026. Whereas Chile started requiring certain companies to include sustainability and corporate governance performances as part of their annual reports from 2021.

It is likely that international companies with plans to expand into Latin America will already be subject to CSR and ESG reporting requirements in their domestic market, and will want to ensure they are compliant in all jurisdictions. 

But irrespective of regulatory requirements, companies operating in Latin America are increasingly aware of the need to act responsibly and to communicate their CSR actions. Public perception is everything. Therefore news of corporate greenwashing, human rights violations or environmental degradation will not only hurt demand for a company’s products and services but also its ability to attract talent.  

From ensuring ethical supply chains, selecting effective outreach programmes that generate lasting social impact and ensuring staff team diversity, there are many ways that international companies can effectively meet CSR objectives in Latin America. 

It is necessary that companies align their business interests with societal needs, while fostering sustainable development. Effective CSR policies offer a win-win situation for international companies in Latin America – with benefits for society, brand reputation, and stakeholders alike.