Impact Improvement on a Multinational Scale: How Gerdau Is Moving Forward on Its B Corp Journey
May 24, 2023
Brazil-Based B Movement Builder Makes Public Impact Improvement Goals for Social and Environmental Benefits
This article was created with Gerdau, a B Lab U.S. & Canada partner for Champions Retreat 2022.
As one of the first multinational companies to join a new B Lab program designed to engage large companies with the B Corp movement, Gerdau has committed to impact improvement through more transparent and sustainable operations. Three years into its journey as a B Movement Builder — a collaborative program for multinationals using business as a force for good — the Brazil-based steel company continues to take steps toward B Corp Certification. With other businesses, they are working to address the world’s biggest challenges while meeting new expectations from customers and workers.
In aligning with the movement that currently has over 6,700 B Corps globally, Gerdau aims to demonstrate how multinational companies can join other businesses of varied sizes, sectors, and scopes to improve their impact. As one of the leading producers of long steel and special steel in the Americas, Gerdau has more than 35,000 workers and operates in nine countries. The Brazilian company is one of the largest recyclers in Latin America, transforming millions of metric tons of scrap into steel every year.
Gerdau is more than 120 years old and has revenue above BRL 82 billion (USD $18 billion), but its leaders realize the need for continual learning and innovation to ensure its long-term future. “The best part of being a B Movement Builder is to be with other multinationals facing some of the same challenges, not only on the B Corp journey but as a more conscious company,” said Paulo Boneff, Global Head of Social Responsibility at Gerdau. “Together we are looking to raise our bar on social and environmental standards.”
Gerdau also is taking steps toward B Corp Certification, incorporating lessons from being a part of the B Movement Builder program and from using the B Impact Assessment to evaluate its corporation-wide impact.
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Impact Improvement Lessons with Other B Movement Builders
With the other original B Movement Builders — Bonduelle, Givaudan, and Magalu — and mentor companies Danone and Natura &Co., Gerdau has found a learning cohort of publicly traded corporations that are focusing on more than the bottom line and learning from experts and with the other companies about impact-minded business practices such as a living wage. “Through the network that we have with these companies, we are able to openly engage in this space,” Boneff said. “We have the opportunity to discuss common issues we are facing and how we can improve our operations. We have trust in each other.”
As part of the B Movement Builders program, each company makes a public commitment to three impact-improvement goals. Gerdau opted to focus on women in leadership, water reuse, and carbon emissions. “Previously we set annual goals but not long-term,” Boneff said. “So we set 2025 and 2030 goals for these KPIs — this is something we believe is important and need to prioritize. We think we need to change faster.”
Gerdau has already seen progress toward its goal to have women in 30% of its leadership roles by 2025, he said. “With this clear path and direction, the leaders in all of our business divisions know they need to work on that,” Boneff said. “It’s a pipeline, looking for future leadership transitions as people retire. That means considering how we can prepare more women for management positions and creating a program to speed that up within Gerdau. It’s a way of thinking about the whole process.”
As a B Movement Builder, Gerdau also sees an opportunity to help build the B Corp community and encourage other large, multinational companies to join them on the impact improvement journey. “We see this as an ecosystem, and are considering how to create benefit not only for stakeholders but create these waves in the countries where we operate and invite more major corporations to engage on the journey,” Boneff said.
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Impact Improvement with the B Impact Assessment as a Goal-Setting Tool
Gerdau also has discovered lessons and areas for improvement through the B Impact Assessment, an online tool that companies can use to measure their impact and pursue B Corp Certification. Julia Baptista Jung, Social Responsibility Specialist at Gerdau, said the B Impact Assessment is helping Gerdau take a more holistic look at our social and environmental impact and practices related to customers, employees, and suppliers.
It also pushed the company to better measure and manage its data on environmental, social, and government (ESG) factors and standardize that information throughout the company. “Now we are using the [B Impact Assessment] as a great management tool,” Jung said. “It’s a way to monitor and track our evolution on sustainability topics.”
Internally, Gerdau is using the B Impact Assessment to help managers throughout the company better understand B Corp values and how their everyday work connects with social and environmental impact goals, she said. “We involve all of the process leaders in answering the [B Impact Assessment] and providing evidence” about the company’s practices, she said. “Answering questions on the [B Impact Assessment] is quite a training for them as well.”
Through the assessment and ESG-related goals, Jung said Gerdau is setting a course for long-term impact improvement and growth. “Our aspiration as a company is to be in 10 years one of the most safe, profitable, and admired companies in the steel chain,” she said. “One of the pillars that will take us there is improving our ESG practices, and if you take a deep dive into those specific ESG pillars, we say we will maximize our positive impact by being a B Corp.”
Because B Corp Certification touches on many aspects of social and environmental impact, Gerdau sees it as an opportunity to shape strategy and pursue continual improvement. The company created a sustainability training program that shows how sustainability is incorporated throughout the company’s operations. “It’s not just about ESG from the standpoint of risk,” she said. “It’s how we are improving our practices, raising the bar, and maximizing our positive impact.”
To broaden awareness of B Corp values throughout the company, Jung has visited many of its locations for worker-led discussions of social and environmental impact. “I put this topic on the table with our leadership so we can exchange best practices and learn from each other,” she said. Gerdau’s plans for impact improvement include launch of a project to renovate more than 13,000 vulnerable housing units across Brazil in 10 years, and a volunteer program that will include long-term goals for community engagement.
Impact Improvement Throughout the Supply Chain and Stakeholders
Beyond its own impact, Gerdau sees a large opportunity to spread the word about impact improvement as part of the B Corp community among its partners, customers, investors, and other stakeholders. By encouraging its more than 200 suppliers to incorporate the B Impact Assessment in their impact measurement, Gerdau can create ripples of change that lead to waves of social and environmental benefit. “It’s important to share with them that [B Corp Certification] is not only a label, but it has meaning for our standards, our procedures, and our values,” Boneff said. This includes explaining the role of the B Impact Assessment at the company’s annual Supplier Day and communicating about its use at investor meetings.
It’s all part of being transparent about the company’s B Corp journey and why Gerdau is prioritizing impact improvement, he said. “We want our future organization to have openness and the true space to talk and ask questions. We have some impacts to address, and we need to talk about them. Otherwise we are not looking for the solution.”
The real change will happen among the workers who carry out Gerdau’s business every day, Boneff said, and are best suited to help shape solutions for social and environmental impact. “We are not doing this to sell more steel,” he said. “Every employee is responsible for their daily actions and decisions. We need people to be more conscious, even about the small daily decisions they have to make.”
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