Constant change is an inevitable fact, there is no way to ignore it. The only certainty we can have is that everything will change and, therefore, in our company, in our community and in our family, we have to be prepared for it. Change is occurring in our society at an increasingly rapid rate.

We entered the first century riding horses and ended the 19th century in the same way. However, 69 years later we were walking on the moon. Since then, the speed of change has only increased. Internet, cell phones, big data and artificial intelligence are things that were only imagined in the best science fiction films. This fact alone makes strategic decisions increasingly difficult. Global trends can change suddenly and new technologies can violently impact business.

The solution to surviving in this VUCA (volatile, uncertain, complex and ambiguous) world is the quality of decision making. Good decision-making, as we will see, is only possible when we correctly analyze the risks and opportunities, in a broad and plural way, in the context of each company. The sugar-energy sector, in general, tends to benefit from global macrotrends.

The world tends to accelerate climate commitments, aiming to reduce greenhouse gas emissions, which obviously benefits biofuels, especially ethanol. Based on available information, ethanol is the best raw material for new energy routes, such as sustainable aviation fuel, and the hydrogen cell, as a propellant for light urban vehicles. According to projections, the world population is expected to continue growing until 2100, which, combined with strong urbanization (it is estimated that, in 2050, 70% of the world's population will live in cities), increases the demand for food, including sugar. Such growth also drives energy demand, for which both ethanol and biomass can be part of the solution.

On the other hand, some threats are also present, including: the eternal dilemma of competition between the use of land for food production and other purposes; the emergence of competing disruptive technologies; a possible setback in globalization due to increased protectionism; and a consumer tendency to benefit from local products.

All of this, without considering relevant geopolitical changes, which can alter the supply chain and prioritize domestic strategic interests to the detriment of more technically viable solutions.

Added to these threats is the will of the consumer. This guy doesn't always opt for the best proven product. Individual decisions are not always rational. People, most of the time, do not consume with their brain, but with their heart. Why buy a Louis Vuitton bag when another cheaper one fulfills the same function? Why buy an electric car?

Recently, at an event, I heard a speaker declare that “anyone who buys an electric car will no longer trade it for a combustion vehicle”. It doesn't matter if we prove that ethanol is more sustainable, that it is the solution for Brazil due to its continental dimensions, etc.

What matters is the consumer's perception of value, whether due to the greater engine power, the silence or any other characteristic. When asked about the necessary infrastructure, the speaker reminded us that at the beginning of cell phones, we also had no infrastructure, and that demand forced rapid investment. I was shocked. I realized that perhaps I hadn't looked at the situation from all possible angles.

Without value judgment, that is, without going into whether the speaker was right or not, this is just an example that shows that, when we make decisions, we have to look at the issue from all angles.

The problem is that, in general, we all have biases, the result of our beliefs or even desires. Without realizing it, we tend to look for those arguments that reinforce and give a rational aspect to our points of view, ignoring arguments to the contrary. Not infrequently, we expose ourselves to an environment that also tends to reinforce these views. In the VUCA world, this could be the difference between surviving or dying.

Another curious aspect in decision making is that we tend to overestimate the return and underestimate the risks. In an investment, for example, we can get the capex value right, but it is a common mistake to underestimate the need for working capital for a project, as well as the timing of the cash flow. And timing, sometimes, is everything. Who doesn't remember the first decade of the century, when delays in the release of financing from the National Bank for Economic and Social Development and delays in the delivery of equipment by capital goods industries forced plants to delay the start of their cash generation in more than a year? How many of these companies fell by the wayside because of this?

Therefore, the quality of decision-making in an institution is essential to guarantee its performance and perpetuity. A company with robust governance, which has an active board of directors, with well-defined responsibilities and diversity among its members, tends to make better decisions than those in which the decision is monocratic. In the past, a single person could store enough knowledge to make winning decisions.

In a world like today, this is practically impossible. It is necessary to have people in corporations who think differently, who have different training and who bring the contradictory. We need to listen to the contradictory, even if it bothers us.

An efficient way to achieve this is to hire independent, professional advisors whose experience in other areas can contribute significantly to the organization. Note that there is a difference between an independent advisor and an external advisor. The external advisor, although coming from outside, can represent a partner or a group of partners. The independent advisor is the one who represents the interests of the company (performance and perpetuity) and, therefore, must not have any conflict of interest to carry out his role.

Another good practice is the existence of committees that can advise the company's management and the board, in particular: audit committee, human resources committee and financial committee. The existence of committees allows their members to focus on more specific issues. These committees may also rely on external experts.

As we have seen, the sugar-energy sector tends to benefit from global macrotrends, however, the future is never guaranteed. It is essential that institutions, whether government, associations or companies, constantly carry out analysis, not only of the opportunities generated by these trends, but also of the risks, as well as their mitigants. Good governance allows decisions made based on these analyzes to be more successful.