Increasingly important in the business world.
ESG, which refers to Environmental, Social, and Governance Factors, is an essential criterion for assessing companies’ commitment to sustainability, social responsibility, and ethical governance practices, playing an increasingly important role in the business world.
Environmental Factors
A company’s practices and policies related to the environment, such as its impact, from carbon footprint and efficient resource use to waste disposal and biodiversity preservation. Its adaptation and response to climate change and how it minimizes its environmental impacts. These factors are increasingly important for investors and consumers who seek to support companies committed to sustainability and environmental protection.
Social
Involves how a company manages its relationships with employees, suppliers, customers, and the communities in which it operates. This includes issues such as human rights, working conditions, employee health and safety, diversity and inclusion, and engagement with the local community. In our view, engagement in socially encompassing issues changes companies’ image, being seen as more sustainable and responsible, attracting both conscious consumers and responsible investors.
Governance
The way a company is managed and the set of rules, practices, and processes by which the company is directed and controlled, with transparency, business ethics, corporate responsibility, ownership structure, management quality, shareholder rights, and compensation policies.
Increasing relevance of the topic and lower tolerance for risks
More attention to social factors
Increase in ESG investments in emerging markets
Reduction of CO2 emissions in the supply chain
Incorporation of negative externalities of economic activities
Increased regulation and standardization of reporting and metrics (CSRD 2023)
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