The acronym ESG is becoming more prominent in companies’ daily businesses. But do you know what it stands for?
It means environmental, social and governance, and represents a set of practices that aims at establishing if the operation of a company is sustainable, aware and well managed. Such practices are being increasingly included in the agenda of large corporation.
In the webinar “Brazil and Texas | Best ESG practices”, promoted by Drummond, Felipe Santarosa, minister to the Brazilian Consulate in Houston, addressed the increase in the interest in ESG practices.
“Over the past six months, we have witnessed that this is a topic that arrived very strongly in the agenda, to the point that it is currently almost a recommendation.”
The minister also stressed the importance of the Brazilian entrepreneur knowing ESG standards.
“These guides that tell you what to do, how you should present yourself, introduce the Brazilian entrepreneur for them to adjust to the American business model, I believe that it is currently essential for the Brazilian entrepreneur to read about it and check if their company fulfills these goals, in the environmental, social and governance aspects”, added Santarosa.
When did the ESG acronym come about?
According to the National Bioenergy Union (UDOP), the acronym first appeared in 2005, in a report called “Who Cares Wins”, from an initiative led by the United Nations (UN).
At the time, 20 financial institutions came together to create guidelines and suggestions as to how adopt environmental, social and governance issues in asset management, securities brokerage and researches related to the matter.
It was established that the incorporation of such factors in the financial market resulted in more sustainable markets and better results to society.
A few steps for an institution to be ESG
Environmental area (E): conscious use of natural resources, reduction of greenhouse gas emissions and waste reduction;
Social area (S): offer better work conditions for employees, adopt inclusive policies to foster diversity in the company, and respect and responsibility towards the customers and employees;
Corporate governance (G): adopt an anti-corruption management, have tax transparency and compensate employees fairly.
Watch the webinar Brazil and Texas | Best ESG practices:
Written by Marcos Ferreira, Content Assistant at Drummond Advisors