ESG a necessary agenda
ESG a necessary agenda – As I think about the structure and content of this article, the world is still experiencing a major health, economic and social crisis. The new coronavirus (Covid-19) continues to claim lives, families and histories, promoting the impoverishment of millions of people and widening social inequalities on the planet.
In January 2019, before the outbreak of Covid-19 cases in the world, the World Economic Forum, in collaboration with the Harvard Global Health Institute, released a white paper in which it warned of the economic and social risks that pandemics would cause to nations in the coming years. At the time, the organization pointed out the need for efforts by the business community to manage pandemic risks. It was estimated that pandemics could cause annual financial losses of 0.7% of the world’s GDP, something around US$ 570 billion. But, in the current context, that number could be much higher. And the estimate is that the number of people in extreme poverty will reach 150 million this year.
In this scenario, issues related to worker safety and health, organizational culture, communication with stakeholders – many of them directly and indirectly affected by the pandemic – and corporate responsibility itself, intensified the agenda of decision makers in organizations. The growing pressure from investors, the media and society for an agenda of integration of environmental, social and governance (ESG) aspects into business, more organizations have highlighted the importance of the theme for creating long-term value and for improving the risk management, corporate reputation and relationships with capital providers.
ESG aspects exist in any and every organization, what does not exist is the practice of measuring them, monitoring them and connecting them to the financial value created by the organization. Many organizations end up losing financial or economic value due to mismanagement of these aspects, which end up becoming fines, labor lawsuits, hours stopped by protests from the surrounding community, brand devaluation due to illegal actions, etc. In turn, good management of these aspects promotes worker engagement resulting in greater motivation and better production; good supplier management can ensure supply stability in addition to product quality, punctuality, etc.; environmental policies and procedures prevent waste, fines, accidents or even disasters. Thus, there is no ESG vs. competitiveness dichotomy. Integrating ASG is competitiveness in today’s business context and will gain more and more strength going forward.
If a short time ago debates about planetary boundaries were restricted to NGO circles, today we see more and more governments, companies and capital providers with a clear understanding of these issues with the success of business. Some examples among many:
Read the rest of the article in the LUBES EM FOCO magazine – issue 82, presented below:
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