What is ESG and why is it important for companies?
The acronym ESG comes from English and stands for Environmental, Social and Governance (“Environment, Social and Governance”). This is a concept that has been gaining attention and is linked to new trends in business practice. It includes the main points of corporate management: environmental responsibility, social responsibility and good governance practices.
ESG guidelines deserve special attention from companies that seek to strengthen competitiveness and are concerned about their customers expectations.
More than that, ESG brings criteria that indicate the importance that the company attaches to the sustainability of what it produces and its management model, a differential that goes far beyond the economic issue, but that affects the organizations image.
We will show each of the ESG aspects. Check out!
Environmental aspects
The market today has a much more critical view of the industrys environmental responsibilities. Therefore, there are requirements to ensure the lowest possible environmental impact in the production of products.
Some procedures can indicate whether the company is on the path to its environmental responsibility. Lets see.
Waste management in production;
Means to eliminate pollution resulting from processes;
Environmental and quality certifications;
Publication of reports that demonstrate strategies in the area of sustainability;
Raw material management;
Sustainable energy sources;
Satisfaction of the public, which identifies with the companys values of environmental responsibility.
Social aspects
A companys social responsibility also interferes with its image.
It is necessary to observe:
Does the company care about the people involved with its work?
What is the companys contribution to society?
The answer to these questions may indicate the degree of managements commitment to society.
Lets look at some aspects that can give a clearer view of this responsibility:
Commitment to the well-being of employees;
Employee qualification programs;
Employee benefits;
Clarity and commitment to its Organizational Culture;
Relationship management with publics.
Governance
The companys responsibility in relation to its governance concerns the way in which its administration occurs by the managers and the respect for all the organizations stakeholders.
We can highlight some indicative aspects of good governance, connected with good ESG practices:
Transparency in financial management;
Transparency in accounting reports;
Compliance policy (compliance with law and ethics);
Risk management;
Fair compensation for employees and shareholders.
Does ESG need to be a priority in the company?
For those who want to stand out in the market, yes! The companys management based on ESG guidelines reflects in its image in a very positive way.
The financial market already maintains ESG indicators as one of its priorities to assess which are good investments, creating indices that prioritize companies that demonstrate a real commitment to sustainability in their policies, generating value for society, management and other stakeholders. , with less environmental impact.
We perceive, therefore, that there is a market tendency to improve processes with an eye on environmental and social sustainability, and on governance that makes these actions possible. For this, actions aimed at social issues are necessary, making the companys activities and its image more stable before the public, as well as protecting its actions and market value.
Profills is connected with the best business management practices, encompassing the various aspects relevant to society: environmental and social responsibility, and governance that values values.
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