ESG - From theme complexity to simplicity and errors
The ESG – acronym for “environmental, social and governance”- encompasses business models and practices that define sustainable management investments. The corporate world's response to the UN's Sustainable Development Goals (SDGs) must go beyond speech and promote effective actions.
The scope of the acronym is as vast as it is complex, which has led to some mistakes, as if raising awareness of sustainability was something new and maintaining corporate compliance programs was a simple task. ESG cannot be reduced to a mere ideology in order to gain supporters. The criteria of its three pillars aim to analyze factors that are, directly or indirectly, related to the business and require the conscious engagement of socially responsible companies and investors. The proposition of numerous movements disclosed in a continuous and, sometimes, repetitive way, ends up emptying the real meaning of ESG investment. In other words, it is not enough to declare oneself adept at an ESG agenda, there must be an integration between policies, practices and data in an organized way, as well as the adoption of clear and systematic methodologies.
In addition to demanding responsible social practices, investors realized that companies with ESG agendas add economic value and have their images better evaluated, leading managers to rethink their routines and develop sustainable practices supported by technological developments. The ESG is part of an evolution that cannot be contained and points to needs to be overcome, but its discourse must reach an effective practice. It is a process that takes time. There is no sector that, due to technological evolution, the pandemic or another set of factors, is not undergoing changes. And where there is change, it is impossible not to talk about the acquisition of knowledge, the construction of new cultures and new ways of relating within and outside the economic sphere. If ESG involves behavior change, nothing fairer than placing it within the scope of education, the main vector of social mobility and adaptation to new circumstances. Governance, sustainability and social responsibility are essential for a more responsible action and society is making its choices by studying, working and investing in organizations that are attentive to these causes. It is necessary that each one participates actively and that it also provides a return to society. But, instead of fuss, inconsistent actions and their derivative risks, it is necessary to ask where to start this change, how to break these barriers?
Not disregarding actions in socio-environmental projects, nor quota policies widely implemented by companies, if there is no basic training, we will go around in circles. It is not enough to speak, just as appearances are not enough, to show oneself attuned to reality. Immediate actions that place companies in an apparently prominent position are not enough, but in the medium and long term, they will prove to be innocuous due to the complexity and planning that the theme requires to become perennial. Companies need to redefine and formalize methodologies for ESG to be consolidated and, at the same time, create a new culture among their peers based on promising projects. Understanding the environment, social development and governance as paths – not simple or short – but absolutely necessary for a lasting and beneficial transformation. Defend the ESG criteria with actions that, in fact, minimize errors and produce positive results.
Our focus remains on education, which is and has always been indispensable for any kind of transformation. Once again, we understand that our role is to collaborate with this change based on what we believe in: educating for today's world, using the technological resources we already have and anticipating the impacts we will suffer in the future. Our IESKO institute is the materialization of our understanding. Not mere ideology, but effective and transforming action.
SOME OF THE ESG CRITERIA FOR COMPANIES
– ENVIRONMENTAL – use of renewable energy sources; waste management programs; attention to issues of climate change, deforestation and air and water pollution; biodiversity practices; adequacy of raw material supply.
– SOCIAL – positioning in relation to human rights; relationship with employees; training and continuing education programs; involvement with social and philanthropic causes.
– GOVERNANCE – management focused on the interests of employees, shareholders and customers; financial transparency; absence of conflicts of interest; diversification and inclusion of managers; balance between remuneration and profitability; retribution to the community.