understand what the concept is and how to apply it in business

In view of the 17 Sustainable Development Goals (SDGs), established by the Global Compact in a UN initiative, in 2004, the term ESG, which stands for “Environment, Social and Governance”, was coined. Still little known outside the corporate circle, the term refers to the adoption of sustainable, ethical and inclusive behaviors that provide a better quality of life for all.

Because of this, the number of companies that have adopted the method, or at least claim to be, has been growing in recent years. However, there is an important difference between being adept at this management model and actually implementing it in the company’s daily routine.

“The ESG practiced correctly by companies would be the one that aligns the discourse with corporate practice, the one that transports the motto ‘mission, vision and values’ from its institutional website to the era of action. As for the examples of wrong practices, it would be saying that they already practice ESG because they are philanthropic, have social actions, conduct manuals, but in practice, employees do not see and do not believe in this form of disclosure”, says Caroline Palermo, coordinator of the MBA in ESG from Trevisan Business School.

Factors that undermine ESG

One of the mistakes made by companies that failed when trying to implement this management modelwhich has become the “news thing” in the corporate market, is believing that just improving the quality of its physical space, benefiting its employees with this, already qualifies it to be considered a company that practices this governance format.

“We have been frequently approached by companies that reveal this purpose of changing the structure of the office with a project that, in their view, could help them implement ESG, but a ‘cool’ office does not make it a company that acts according to this management model”, emphasizes architect Erica Prata, who adds: “architecture is an ally. But, for a company to be considered a legitimate ESG practitioner, it has to go further and carry out actions that produce a social and environmental impact on the community in which it operates”, says the specialist.

Caroline Palermo, in turn, points out that the successful implementation of this sustainable governance philosophy is only possible if the company’s top management complies with the precepts required for the practice of this model. “The mistake is always trying to start with the marketing department without top management being fully committed to the ESG pillars”, emphasizes the expert.

ESG is a growing trend

A recent survey released by Google, carried out in partnership with the MindMiners platform and Sistema B, surveyed three thousand Brazilians over 18 years of age, from all regions of the country. She pointed out that 47% of people in this group could not name a single company that adopted the practice of ESG. To complete, only one out of five interviewed by the global giant of technology He said he had already heard something about this topic. However, 87% of those who received an explanation on how this practice is admitted to consider that it is important for companies to adopt it in their administration.

Ways to implement the ESG model

Amid little general knowledge on the subject, Fabrício Soler, professor who coordinates the Environmental Compliance and ESG courses at Trevisan Escola de Negócios, says that there is no standard manual for implementing this management model. However, he points out ways to achieve this goal.

“Each company needs to build a risk matrix to outline its vulnerabilities and how to mitigate them, looking at the environmental, social and corporate governance pillars; but of course there are common factors, such as ethics in the supply chain, fair work, environmental licenses, compliancereporting channel, among others,” says the professor.

Caroline also points out that there are several actions that can be taken to implement ESG. Furthermore, she considers that these movements should begin with “raising the awareness of top management and employees, followed by a mapping of risks linked to sustainability indicators”.

Fabrício Soler, on the other hand, analyzes that the adoption of this practice is a path of no return and that it is advancing every day. “Now, companies act by intelligencebecause we are adapting and there is no global regulation, but soon it will be through compliance. The market shows signs of this with resolutions, public consultations and certifications”, concludes the specialist.

By Rafael Franco