How Profit and Sustainability Can Work Together
n recent years, many companies have been improving their initiatives involving environmental, social, and governance (ESG) topics to face global and business challenges, not only to contribute to the preservation of our environment but also to keep a profitable business that contributes to the economy.
Randoncorp, throughout its many decades of history, has learned how to apply sustainability goals to remain profitable – with innovation and tech investments. Director of Digital Strategies and Business Mateus de Abreu, explains that while the journey might appear recent, it’s just the tip of the iceberg. “When talking about innovation and sustainability, either with the community or with the environment, it’s embedded in the company’s values. It’s not something you start and develop in two years; it’s something that comes along our seventy-four-year journey.” Randoncorp’s sustainability commitments include reducing 40 percent of greenhouse gas emissions by 2030 as well as eliminating waste disposal in industrial landfills and reusing 100 percent of treated effluent by 2025. In 2022, it announced an investment of R$100 million in renewable energy projects to supply all its units by 2030. The company focuses on innovation initiatives and actions: continuous and disruptive innovation, sustainable mobility, collaboration and open innovation.
Startups and corporations alike are aware that, in terms of innovation and sustainability, perennial business growth is no longer possible if entrepreneurs want to remain competitive and deliver results for many years to come. Randoncorp’s solution-driven innovation and transformation has consistently acted to improve the learning and dialogue between startups and corporations. In 2020, it launched Randon Ventures. “We saw a bit of market hype and euphoria in 2021 and 2022, and a lot of companies invested heavily without keeping results and sustainability in sight,” he says. “That was never our case. We always kept our feet on the ground, looking for solutions and startups that were aligned with our values, that were aligned with our practices, because this is not a short-term journey.”
And the long-term journey has to involve both sustainability and profit. “To build a lasting legacy, there’s a deep relationship between startups and the ecosystem. Because in the end, despite having a good solution, we need value alignments to move forward in a partnership and, later on, in an investment.”
Stay grounded because this is not a short-term journey. To build a legacy, to build a relationship with startups and with the ecosystem, it is a long-term journey.
With that in mind, Mateus warns entrepreneurs that targeting only one of the fronts (sustainability or profit) might lead to difficulties further along. “Startups that seek stable financial health, that have a very clear purpose and solution, and that seek to improve either their environment or their social surroundings might be more successful in finding funding.” There’s a risk even if you’re a high-impact startup with a clear solution: without a long-term, well-resolved financial and environmental perspective, funding is likely to be difficult.
Luckily, Randoncorp does a lot to share the knowledge it has gathered throughout decades of a successful business. “We have Conexo, our physical and digital hub, to connect solutions and entrepreneurs, create challenges, and connect with startups. We have a building in Caxias do Sul and a partnership with several other ecosystems. And we have Randon Ventures, the group unit that deals with startups, invests, collaborates, and often provides acceleration and growth for some startups.” While these actions are connected to Randoncorp, they are not exclusive: the group was also one of the first supporters of Instituto Hélice in Caxias do Sul, and it is affiliated with Instituto Caldeira in Porto Alegre and CUBO in São Paulo. These ecosystem initiatives are drivers for entrepreneurs who need support along their journey, whichever their stage might be. “There are several paths for the gaucho entrepreneur who wants to explore our knowledge and our tools,” says Mateus.
He also highlights the ecosystem’s spirit of “what is mine is yours.” “There’s a very interesting maturity in the gaucho ecosystem,” he says. “The operation is very fluid: the ecosystems of both Caxias do Sul and Porto Alegre are shared. Here, collaboration, synergy and abundance work are much more important than exclusivity work.”
Mateus de Abreu's most important tips for startups:
- Both profit and sustainability must be included in the entrepreneur’s agenda. The solution of a startup should be concerned with numbers but also include any social or environmental impact it generates.
- Have a clear vision and be prepared to communicate it simply and quickly. Investors and accelerators might talk to over four hundred startups in a single year. Without focus and a clear purpose, it might be harder to move forward when it comes to financial and scalability matters.
- Define what your social or environmental impact is. There’s always a social or environmental impact in your solution. When you find out how to engage with it, you can move on to other topics.
- Don’t be disheartened by challenging times. Innovation has always been part of long-lasting organizations. If there’s a period of difficulty, think of how you can restructure the startup in a consistent way, and think about reaping the rewards, especially in the long term.