What is ESG in companies? This subject is one of the most important and is becoming increasingly popular in the market. Mainly because in addition to helping the environment , the profits of companies that work on this subject tend to be higher in the long run.
Basically, ESG is an acronym formed by the initial letters of 3 words in English, which are: Environmental, Social and Governance. Which in Portuguese means (Environmental, Social and Governance). So, understand now what ESG is, how it works and all its importance in business.
All in a practical and well summarized way! You want to receive tips and information to set up your own business. So subscribe to this channel and stay on top of everything you need to know to open your own company.
To try to make this matter very clear for you, we will address the following points: 1. WHAT IS ESG 2. HOW IT WORKS 3.
MAIN ADVANTAGES OF ESG FOR COMPANIES So, let's go! 1. WHAT IS ESG As we said at the beginning, ESG means Environmental, Social, and Governance, which translates to Environmental, Social and Governance.
Basically, it is a set of guidelines and best practices that seek to determine whether a company is socially aware, sustainable and has adequate management. In other words, it is a way of assessing a business's sustainability performance. In other words, corporate sustainability.
And it is based on the 3 pillars that form the acronym of ESG: Environment (Environmental); Social (Social); Governance (Governance). These pillars are used as criteria to assess whether a company has corporate sustainability. This broadens the perspective of business analysis that goes beyond financial issues.
In this way, the ESG seeks to assess whether the company is really a viable sustainable investment option. If it is committed and capable of generating positive impacts in financial, social and environmental terms. Therefore, by working on ESG, a company manages to make its strategy and business model work so that the company's purpose and its respective profit are inseparable.
As a result, it will make the company always keep in mind its professional, social and environmental commitment as well. At the same time, the ESG serves as a guide to ensure that companies understand and work with all of their operations and relationships. In addition, understanding the influence it exerts, its respective impact (whether positive or negative) and what value it will generate.
2. HOW IT WORKS Basically, ESG is based on these 3 pillars we talked about: Environmental, Social and Governance. ENVIRONMENTAL: The environmental pillar refers to the principles and practices that companies work to conserve and preserve the environment.
That is, what environmental impacts they promote. Both positively and negatively. In this way, it also considers its socio-environmental actions and policies to preserve and even improve biodiversity.
For example, we can mention: Reduce or eliminate pollutants; Work with packaging that does not disrupt the ecosystem; Seek more sustainable alternatives in the production process and value chain; Consistent and responsible recycling or disposal of waste; among others. SOCIAL: The social pillar refers to the way companies relate to the people around them. That is, its stakeholders, which is also known as the Public of Interest.
Which in a nutshell, refers to any individual or organization that, in some way, is impacted by the actions of a particular company. Customers, employees, shareholders, partners, suppliers, government, competitors, community, press, among others are examples of a company's stakeholders. As examples of actions in this social pillar, we can mention: Respect and value the rights and well-being of employees; Work and support inclusion and diversity; Help and engage with causes and social projects and interaction with communities; Between others.
GOVERNANCE: And the governance pillar refers to the way companies conduct the management and administration of all their processes. But, in a transparent way, respecting the codes of conduct and ethics as well. As an example, we can mention: Reports honest and transparent; Correct remuneration for shareholders and employees; Be accountable in a professional manner, fulfilling your responsibilities; Fight against possible problems such as corruption, money laundering, exploratory work; Work with products and items with true information; Among others.
3. MAIN ADVANTAGES OF ESG FOR COMPANIES Commitment to sustainable and socially responsible practices reinforces the image of companies. And that makes your reputation and brand value increase.
In this way, it ends up attracting the attention and interest of customers, partners, investors, professionals, among others, who value these same principles. Likewise, talented professionals are increasingly looking for companies that think and act based on meaningful values and purposes and that are similar to their own. Therefore, the ESG can make the company attract professionals who, in addition to being talented, are engaged, committed and motivated with the vision and values of these companies.
From the same point of view, ESG promotes greater engagement with the company's stakeholders, including customers, suppliers, investors and local communities. As we said before. In this way, relationships with the public of interest will become more solid, truthful and with greater trust.
Thus having genuine and beneficial results for everyone. In addition, ESG is able to improve processes and have better business management. Especially because it can identify and solve possible threats and risks.
Such as legal problems, negative environmental impacts or labor issues, for example. Added to this, the adoption of sustainable practices can lead to operational efficiencies and optimization. Which leads to cost reduction and resource savings.
At the same time, with ESG, companies generate positive impacts on society and the environment. All through actions and commitment to society as a whole. And today, many markets and industries are increasingly requiring ESG criteria as part of purchasing and contracting practices.
Thus, by adopting these criteria, companies are able to access these markets, increase their customer base and identify new business opportunities. With all this in mind, it is worth noting that, overall, working on ESG in a company can result in a stronger competitive position. Because it will have solid values and purposes that will direct it to concrete and realistic paths.
And in the long run, it will make all the difference to always stand out. Thus, companies with a strong and coherent ESG approach will be better prepared to face possible challenges and crises. Therefore, we can say that working ESG in your company's strategic planning and risk management greatly strengthens the company's resilience in the long term.
You saw how ESG is a very relevant subject that brings great benefits, not only to your company, but to society and the environment in general. This is very strong and is highly valued by the market. Mainly because it has the responsibility to care for, preserve and improve the world we live in.
And that makes all the difference for any type of business. Can believe! And there?
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