Latin America Leadership Program

During the panel "Regulating for Sustainability: Attracting Investment and Driving Growth”, the role played by public and private institutions as well as civil society in adopting and promoting a sustainable approach that allows the region to compete globally was discussed.

In a thought-provoking dialogue moderated by Ricardo Ernst, executive director of the Latin America Leadership Program (LALP) at McDonough School of Business (MSB), Kerrie Carfagno, director of the Master of Science in Environmental Management and Sustainability (MS-ESM) at MSB, and Alfredo Villavicencio, CIF evaluation specialist, shared their perspectives on the topic.

At the beginning of the conversation, Carfagno and Villavicencio stressed that, although the definition of sustainability is broad, it is necessary to create more awareness about the fact that both the actions of individuals and organizations have a social impact and can reach a turning point without return.

When asked whether it is individuals or the government who should be responsible for the sustainability, as well as the role of regulation on this matter, Carfagno emphasized the relevance that both individuals and organizations show more interest in learning about this topic. As an example, he pointed out that if someone wants to keep a property for several years, should be interested in understanding, for instance, the impact of natural phenomena such as storms or climate change in the area where it is located. Likewise, as a society we must ensure that sustainability is part of the government agenda. In Latin America, whose geographical location very relevant, he indicated, the conditions exist for the private sector to develop adequate policies and a stable environment to give greater acceptance to this issue.

Villavicencio added that there should be more clarity about the benefit of using clean energy, whether through energy efficiency systems such as solar panels or other technologies.

In cities like D.C., he indicated, we might not see natural disasters like in the Southern, where as a consequence of their impact, home insurance has increased. An example is the effect of Hurricane Maria in the Caribbean. In this context, "the role of the government, as well as the financing of private institutions such as banks, is crucial," he said, "especially in the early stages, when a market infrastructure is planning to face this type of events."

The analyst added that being sustainable does not necessarily have to be expensive since there are business models such as co-financing, investment programs and non-profit organizations, among several alternatives.

Regarding the state of environmental, social and governance (ESG) factors that, as a sustainability movement has not gained the expected progress, both panelists acknowledged the relevance of these criteria, but also pointed out that there are multiple frameworks, and ESG is just one of them. Depending on each case, different risk assessment tools are used and they consider a variety of factors such as social justice, salaries, employee training, among others. They also seek to ensure equity when planning and implementing the appropriate framework for each organization.

Using the metaphor “carrot and stick”, Dr. Ernst questioned whether the marketing approach to sustainability has been the right one, if the rhetoric has been abused to create a sense of guilt, and whether a new direction for regulation is needed. A regulation that is not only about sanctions, but also where greater help is provided.

Carfagno agreed that it is important to have a great understanding of why certain regulations are implemented and cited the example of seat belts or airbags in cars. As a result of these measures, there has been a decrease in serious accidents. 

She added that, at the organizational level, incentives such as tax credits, as well as subsidies can help change behaviors positively. An example of this is the support of the government in cities that promote the installation of solar panels. "Even with very small changes, massive policies and changes can be triggered," she said.

To conclude the conversation and referring to Latin America, both panelists agreed that one of the advantages it has in terms of sustainability, unlike other regions, is predictability, and this is precisely what makes it an attractive area for investment and the development of appropriate regulations to compete in a global context.

Organized by: Latin America Policy Association (LAPA), in collaboration with the Latino student organizations Georgetown Coalition, Georgetown University Graduate Association of Mexican Students (GUGAMS), Georgetown Latino Policy Initiative (GLPI), Latin American Business Association (LABA), Latin American Law Student Association (LALSA) y Latin American Foreign Affairs Association (LAFAA).

Sponsored by: Georgetown Americas Institute (GAI), Center for Latin American Studies (CLAS), Global Cities Initiative, Latin American Leadership Program (LALP).