LATAM’s sustainability policy, approved in 2016, considered a number of international references and commitments, which should serve as a guide for its activities (see table), and it explains the correlation between various aspects of the business’ sustainability and management. The clearest example is risk management: a matrix that guides risk mitigation, including those of the environmental, labor and linked to the relationship and reputation of the company with its own public. Management is performed in an integrated manner with other types of risk, such as the financial and operational, among others.
In order to ensure that information and the strategic view of the administration are indeed aligned to the objectives and progress of the company’s sustainability policy, the Management Council will annually monitor the data. The new stage of strategic validation complements the supervision that was already being carried out periodically by the Council’s Commission.
Additionally, whenever a member joins the company’s senior management, he/she participates in immersion activities in the business strategy, where sustainability management is a focus of a specific module of this process.
In order to promote improvements in sustainability management, LATAM is guided by a set of rules, standards, references and international commitments, the most important of which are the following:
- The ISSO 26000 standard: the first international standard for Corporate Social Responsibility (CSR).
- The Global Compact: is an initiative of the United Nations (UN) to promote the adoption of social responsibility practices in the areas of human rights, human rights at work, in the environment and in fighting corruption.
- Sustainable Development Objectives: is a worldwide development program promoted by the UN that defines the objectives and goals related to the eradication of poverty, food security, health, education, gender equality, the reduction of inequalities, energy, water and sanitation, sustainable production and consumption patterns, climate change, sustainable cities, the sustainable protection and use of ecosystems and inclusive economic growth, among other topics.
- Business-oriented Principles and Human Rights: is a kind of guide, prepared by the Special Representative of the Secretary General of the United Nations, John Ruggie, which brings together the parameters and guidelines to ensure the protection, respect and repair of human rights in business affairs.
- The Tripartite Declaration of Principles concerning Multinational Companies and Social Policy: it was prepared by the International Labor Organization (ILO) and it is aimed at promoting the active participation of multinational companies to economic and social progress, while minimizing the negative effects of their activities.
- The Guidelines of the Organization for Cooperation and Economic Development (OECD) for multinational companies: brings together recommendations for businesses and governments, and provides principles and voluntary standards for a business conduct consistent with applicable laws and internationally-recognized best practices.
- The GRI methodology: is the main reference of the sustainability reports. It was developed by the Global Reporting Initiative (GRI), a multi-sectoral international organization that seeks to promote the standardization and continuous improvement of sustainability management and communications in companies and organizations of different sizes and sectors around the world.
The company’s performance in the Dow Jones Sustainability Index (DJSI, for its acronym in English) is the main criterion of this development.
The DJSI is the main global economic, social and environmental performance reference of long-term value creation. The selection is based on a methodology known as Best in Class, which analyzes the performance of corporate governance issues and the economic, social and environmental practices of leading public companies in different economic sectors. Only the leading companies make up the final list, which is published annually. The DJSI membership selection process is carried out by RobecoSAM, an investment consulting firm specializing in sustainability.
LATAM is part of this index since its 2012 Edition, when it was selected in the Emerging Markets segment. Ever since the 2014 Edition, however, it is a member of the Global Index, which brings together the top 10% of the best companies invited. In 2016, this index analyzed the 2,500 largest companies (according to Standard and Poor’s Broad Market Index) of 28 different countries, and 316 were selected. Only two airlines appear in that group.
Transparency in the donation process
By the end of 2016, the Board of Directors approved the LATAM Group’s donations policy. This policy applies to all company subsidiaries and it objectively sets out donation criteria as well as the stages and approval process, clearly defining the various roles and responsibilities.
According to this document, company donations must only be of services (free transport of persons or cargo), species or money contributions.
In line with the sustainability strategy of the group, donations must be aimed at projects that provoke positive social, environmental or cultural impacts and should be directed mainly to people of scarce resources or non-profit foundations of the region.
The donation approval process involves the Corporate, Legal and Compliance areas so as to ensure that they indeed meet the company’s principles of ethics, transparency and abide by the pertinent legislation.