How and why incorporate ESG factors into business?

First, it is important to clarify that it is not a simple task to measure the degree of compliance of each company and which practices are required in each activity segment to meet the ESG purposes and criteria. The methodologies are diverse and the study of this science is quite comprehensive.

It is about changing criteria and continuous effort from companies and their managers, but, keeping in mind the ESG pillars can help to outline the necessary strategies to adapt the company to this new reality. The pillars are: Environmental (environmental); Social and Governance.

· Environmental factors

Sustainability in the production chain and internal policies for the use of natural resources, greenhouse gas emissions (CO2, methane gas), energy efficiency, pollution, waste management, effluents, and biodiversity.

Possible measures: Even if the execution of the business activity does not have direct involvement with environmental issues, it is possible to adjust Enviromental factors in the compan

1. Adopt an environmental management policy, with the definition of environmental objectives and goals, such as the reduction of water and energy consumption, the minimization of waste generation, and the emission of greenhouse gases;

2. Implement energy efficiency practices, by adopting technologies and processes that reduce energy consumption;

3. Promote the use of renewable energy sources, such as solar, wind, and hydroelectric power;

4. Establish waste management practices that include the reduction, reuse, and recycling of materials, and the proper disposal of hazardous waste;

5. Adopt natural resource conservation measures, such as the protection of sensitive ecosystems, the preservation of biodiversity, and the sustainable use of natural resources;

6. To encourage the adoption of sustainable practices among suppliers and customers, by defining environmental criteria and requirements for the selection and evaluation of business partners;

7. Fostering a culture of environmental awareness among employees, by adopting education and training programs on sustainability.

· Social factors

Labor policies and relations, inclusion and diversity, employee engagement, attracting and retaining talent, employee well being, employee health and safety, workforce training, human rights, local community relations and social responsibility, privacy and personal data protection.

Possible measures: Trying to pursue social equality within the company's reality, enabling gender equalization among employees, creating awareness campaigns on issues related to social equality, and eventually supporting social causes.

1. To adopt inclusion and diversity policies that promote equal opportunities and respect for differences in all areas of the company;

2. Establish training and development programs for employees, which allow the acquisition of new skills and knowledge;

3. To promote a safe and healthy work environment, through the adoption of accident prevention measures, occupational health and safety at work;

4. Provide fair remuneration practices and benefits that ensure the well-being of employees, promoting motivation and job satisfaction;

5. Establish clear supplier selection and evaluation criteria that consider social responsibility aspects, such as the promotion of fair labor, respect for human rights, and environmental protection;

6. To promote community engagement and dialogue with society, through social responsibility projects and initiatives that contribute to the development of the communities where the company operates.

· Governance factors

Governance policies, ethics and conduct, independence of the board of directors, management compensation policy, accountability of directors and shareholders, diversity and plurality in the composition of boards and committees, structure of audit and fiscal committees, ethics and transparency, among others.

Possible measures: First, if the company does not have one, it is essential to create a real governance policy, to which the partners will be committed and engaged. The Governance factor involves adopting practices that ensure ethical and transparent management, that consider social and environmental responsibility, and that are capable of generating long-term value for all stakeholders.

i. Establish a clear and efficient governance structure, including the creation of ethics, audit, and risk committees, as well as clear responsibility and accountability guidelines;

ii. Ensure transparency and access to information, by publishing sustainability reports and information about the management of risks and opportunities related to environmental, social and governance aspects;

iii. Adopt risk management practices that identify, evaluate and manage the risks and opportunities associated with environmental, social and governance aspects;

iv. Fostering a culture of ethics and integrity in the company, through the adoption of codes of conduct, training, and incentive programs for responsible and ethical conduct;

v. Establish clear criteria for selection and evaluation of suppliers, clients and business partners, which consider aspects of social and environmental responsibility;

vi. Establish targets and performance indicators related to environmental, social and governance aspects, in order to monitor and continuously improve the company's performance in these aspects.

Companies that adopt these practices and cultivate these values are increasingly present in the market and in the portfolios of investors concerned with ESG criteria, while companies that lack the ability to adapt will quickly lose competitiveness in the market and make room for other players.

A survey carried out jointly by the companies Global Compact, Falconie, and STILINGUE, active in the area, shows that organizations that maintain an ESG agenda have benefited from positive effects, leading to an improvement in the company's reputation and image, optimization of resources, and attraction and retention of talent. The points where companies have seen the most growth due to the adoption of ESG pillars are:

It is possible to follow the ESG agenda, that is, the goals that the government wants to achieve, through the releases on the subject that are made by the UN, through the official website:https://brasil.un.org/pt-br/sdgs.

It is possible to understand whether the company is on the right track if it is in line with the ESG agenda.

The dissemination of such practices is also essential for the company to achieve visibility in the area.