Empowering businesses with ESG tools

This week, Amcham hosted the ESG Forum, and I am sharing my impressions.

This Forum is dedicated to entrepreneurs who want to make a difference in the business world regarding sustainable development, responsibility, diversity and the social impacts of companies.

The event's theme was ESG, and several guests spoke about the impact of this tool on management.

ESG stands for environmental, social and governance. They represent the three main thematic areas companies are expected to incorporate into their administrative core. They define vision, mission, strategy, tactics and values that they consider ideal, measuring and reporting the sustainability performance of their business partners and society.

The world demands that companies comply with these pillars. Consumers and employees want them to be good stewards of capital but also natural and social capital and have the necessary governance structure to support that sustainability.

Investors are incorporating ESG elements into their investment decision-making process, making the tool crucial from the perspective of securing debt and equity capital.

?And what do these letters represent?

E: Environmental. Companies must understand their impact on water and soil pollution, use recycled resources, and take action to mitigate deforestation and promote biodiversity.

S: Social. The concern here is how to manage employee development and labor practices, your product safety and quality responsibilities, the labor supply chain and health and safety standards, and how to provide disadvantaged social groups access to your products and services.

G: Governance: Includes shareholder rights, board diversity, how to compensate the executives and how their compensation aligns with the company's sustainability performance. Corporate behavior issues are also considered, such as anti-competitive practices and corruption.

The ESG criteria are related to the SDGs (Sustainable Development Goals), which aim to 'end poverty and other deprivations and must go hand in hand with strategies that improve health and education, reduce inequality and stimulate economic growth - all while fighting climate change and working to preserve our oceans and forests'.

?

Why is it important?

At a higher level, ESG and SDG help the corporate world recognize what they can do to increase society's wealth, to preserve the environment and sustain a healthy economic system.

When we focus on company growth, investors use the ESG framework to assess its environmental, social and governance capabilities when making investment decisions.

As a businessman, I know that incorporating good ESG practices makes our companies less likely to face legal issues. In addition, we can promote anti-fraud actions and campaigns for social development as these measures corroborate the maintenance of the company's financial health and enhance the credibility of our services.

#ESG #UNSDG #SDG #WORLDED #enterpreneurship