Suzana Fagundes: “Sustainability is integrated into our strategy”

Suzana Fagundes is General Counsel of Localiza, Latin America's largest car rental company - with over 621 agencies across 406 cities - and one of the world's largest by fleet size and market capitalization. In this interview, Ms. Fagundes takes us through the pandemic's main impacts on Brazil's car rental sector, the key role of ESG within Localiza and the trends we can expect in the industry over the next 12 months, among other issues.

Posted Monday, December 6th 2021
Suzana Fagundes: “Sustainability is integrated into our strategy”

Leaders League: What are the main challenges of being General Counsel of Brazil’s largest car rental company? Over the past 12 months, what legislative and regulatory challenges would you highlight? 

Suzana Fagundes: Localiza's legal department is strategically positioned to support the many areas of the company and act as the guardian of its reputation. To do so, we must understand the intense transformation that the mobility sector is going through and to explain it to those with whom we interact.

In recent times, discussions with authorities and civil society regarding issues that are still not settled in the regulatory and judicial spheres have encountered additional challenges, due to the impacts of COVID-19. The use of technology and joint actions with trade associations which have converging interests to our own was essential to allow for the continuity of legitimate and relevant discussions for society.

Technology, which has become a great ally of public, private, and non-governmental institutions, and of citizens themselves, by simplifying business, access to information and increasing the transparency of relations, has also brought adversities such as the dissemination of fake news and a rise in cybercrimes. It was also responsible for the increased exposure of companies to the media and social networks in general.

Therefore, it has become essential to reinforce corporate governance practices and strengthen corporate culture, thus allowing companies to act consistently, and aligned with their respective values, which has been successfully performed at Localiza in partnership with our legal department.

 

Which have been the pandemic’s main impacts, from a legal and regulatory perspective, on the car rental industry in Brazil? Which key industry trends can we expect to materialize over the next 12 months and beyond?

The mobility sector is undergoing constant transformation, with the surge of innovative business models throughout the entire ecosystem. This restless dynamic represents a key challenge for the operations of the legal department which generally relies on past experiences, based on precedents, laws, and doctrines which have taken many years to be established, something which is incompatible with the ever-changing nature of said sector.

At Localiza, we embrace this challenge as an excellent opportunity to contribute towards establishing a legal environment which will allow innovative businesses to thrive, provide legal security and have a positive impact on all of society. 

Therefore, one can say that the pandemic has accelerated the transformation in our way of working, bringing us even closer to business operations, in order to proactively seek solutions which make business viable and provide legal security to influence the corporate environment positively and legitimately, safeguarding good governance and ethics in all relationships.

We understand that extraordinary results depend on our role as a socially responsible company

The RA1000 certification, a seal granted by Reclame Aqui, was created to highlight companies with excellent customer service. Regarding the achievement of this certification and consumer rights cases, do Localiza’s customer support and legal departments work together to prevent these disputes?

One of Localiza's primary values is its passion for clients. Therefore, we try to understand our customers' dissatisfactions. We analyze the root causes of the complaints we receive and learn from all the employees who interact with our clients.  

Based on this, we identify the procedures to be improved by type of activity and location, and we establish, together with the business departments, an action plan to remedy whatever is necessary.

The acknowledgement from the Reclame Aqui site is a natural consequence of the consistent and obstinate work of the entire business to ensure our customers have the best possible experience.

 

According to XP, Localiza is among the best performing car rental companies regarding ESG criteria, especially since successfully neutralizing its Co2 emissions. Which corporate policies were implemented to reach this landmark? And what are the challenges of prioritizing an environmental agenda when working with assets such as automobiles?

At Localiza, we understand that extraordinary results depend on the generation of shared value and the exercise of our role as a socially responsible company. Therefore, we have a long-term vision, and we take care of the impact of our actions, always seeking to increase the positive and minimize the negative impacts.

Sustainability is integrated into our strategy and addressed throughout all the activities within our company. Our purpose reflects this vision, with sustainability as a driving force. 

The Governance and Sustainability Committee, which advises the Board of Directors, and the Sustainability Committee, reporting to the CEO, have accelerated our ESG agenda. It led to significant results for the community, our employees, and the environment. Neutralizing the organization's operational CO2 emissions is one of these achievements.

Other initiatives on the environmental front include powering 130 branches and stores with solar energy and implementing dry-cleaning in roughly 60% of our fleet. This method reduces water consumption by 150 times. Furthermore, 99% of our cars are running on ethanol, a less environmentally harmful fuel.

We believe we can advance even further on all fronts of the ESG agenda, and we are working to do so.

Mobility was one of the hardest-hit segments in the first months of the pandemic

Localiza is listed on the ‘Novo Mercado’ segment of B3, reserved for companies with the highest standards of corporate governance, and has recently earned the ISO 37001 anti-bribery and anti-corruption certificate. What is the importance of corporate governance at Localiza today? And how does the legal department act on this front?

At Localiza, we seek excellence in everything we do, and it is no different in governance issues. Since the founding of the organization, we have continuously evolved in the strengthening of our governance. We believe it is only through it that we can successfully advance in our purpose. Thus, it is the Board of Directors' responsibility, with the assistance of the legal department, to be the guardian of our governance. 

We are aware that to be effective, governance must permeate the entire organization. It must be practiced by each of us daily. And to achieve this, we must disseminate it into our culture.

For governance to thrive, we must base our actions on trust and ethics as outlined in our values. Accordingly, we seek to constantly improve our integrity program, which led us to pursue the ISO 37.001 certification. It was hard work by numerous departments of the organization, with unconditional support from senior management, coordinated by the legal and compliance departments, of which we are very proud.

This certification and so many other acknowledgments only motivate us to continuously seek advances in the Company's integrity culture, tirelessly watching over its reputation.

 

Localiza recorded a net profit of R$ 447.9 million in the second quarter of 2021, compared to R$ 89.9 million in the same period of last year, an increase of 398%. To which main factors do you attribute this performance? And what is the company’s outlook for the second semester?

We owe our results to the dedication and focus of our team, which inspires and transforms the company. Mobility was one of the hardest-hit segments in the first months of the pandemic when restrictions were put in place limiting the free movement of people. Therefore, we operated with speed, resilience, and efficiency in managing our processes and assets. Always with the best governance practices and supported by our values. Despite an initially pessimistic scenario, Localiza resumed business in less than three months, motivated by Brazilians who saw in cars a mobility solution that promoted a greater sense of security.

 On another front, within a context of social isolation, high dollar exchange rates, and barriers to international travel, tourists have begun to explore still unfamiliar destinations in Brazil, fomenting domestic tourism. 

To ensure its clients with an increasingly safer environment, Localiza invested in the best sanitation for its vehicles and prevention practices of the market. Investment in technology accelerated. We also launched Localiza Meoo, a subscription-based vehicle, and Zarp, a unique solution to meet the primary needs of application drivers. 

We believe that the trend towards a change in consumer behavior, which values use more than ownership, will continue to create more opportunities for the entire car rental industry. Technology and mobility will increasingly work together to create solutions for citizen's demands in an expanding, dynamic, and highly competitive market.