Why is ESG important to companies?

Why is ESG important to companies?

Have you ever heard of ESG? If not yet, this is the moment to learn more about the solution, after all, for a company to remain in the market it’s not enough just to achieve good financial goals. Now, it’s time to improve social and sustainable pratices.

research released by the National Industry Confederation (CNI, in Portuguese) in 2020 revealed that “about three out of ten Brazilians are willing to pay more for enviormentlly friendly products”, that is, with low emissons of pollutants and waste.

Similarly, brands that are concerned with the quality of life and work of all involved, gain consumer preference.

But what does it have to do with ESG?

Everything! ESG is the acronym for Enviormental, Social and Governace, which can be described as a set of enviormental, social and governance practices.

It concerns the actions adopted by a company to act in a more sustainable way, environmentally and socially, and with good administrative practices.

    • Environmental: includes waste management, management of pollution generated in operations, deforestation, the use of renewable sources and other attributes related to sustainability.
    • Social: it concerns the social relations of a company. This includes employee relationships, conflict management, gender equality, safety and everyone’s health.
    • Governance: is more connected to the management area. It involves management policies, corporate conduct, anti-corruption practices, whistleblower channels, audits and others.

And how does ESG influence business?

With the change in consumer behavior and the global themes that guide people’s routines, ESG has gained greater prominence among managers and investors.

For example, the urgency to combat climate change has been one of the mobilizers of recent years. According to the United Nations, to limit global warming, carbon emissions from pre-industrial levels are expected to be reduced by 45% by 2030. And this is one of the issues directly related to ESG.

Another important point is the social side. Companies need to know their employees and make them feel good within their work routine. This includes providing safe, dignified environments and equipment, valuing staff, and encouraging the empowerment of each member.

Today it is already known that brands that prioritize such issues are more likely to achieve stability and profitability in the long run. Therefore, “acting according to ESG standards increases the competitiveness of the business sector, whether in the domestic market or abroad” (Global Compact).

Risk analysis and decision-making are made clearer with this process, which makes the company more solid and resilient in the face of market uncertainties and vulnerabilities.

Want to apply ESG in your company?

Check out Interact’s ESG solution. With it you will strengthen the principles of corporate governance, generating value to your business and strengthening the reputation of your brand.

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