The ESG theme (Environmental, Social and Governancehas never been more in vogue in Brazil than now. This is because the ESG20+ Public Consultation was launched in the country, with suggestions for structuring environmental, social, and governance standards. Available until the end of March, it is expected to give rise to a fundamental regulatory framework to standardize practices, ensuring that all public and private companies follow clear and uniform criteria.
In the current world, ESG has been widely adopted for investors' decision-making. They tend to prioritize companies that adopt good practices because they generally present lower risks, are better prepared to face regulatory challenges, and demonstrate a commitment to long-term sustainability. All these factors can lead to greater profitability and financial stability, as well as meet the demands of consumers andstakeholdersfor administrative transparency, ethics and responsibility.
ESG is synonymous with solidity, lower costs, better reputation, and greater resilience amidst uncertainties and vulnerabilities. Many countries and economic blocs – such as the European Union (considered a pioneer), the United States, and Canada – already have their regulatory frameworks developed.Thus, the existence of unified criteria and their compliance by organizations will elevate Brazil to a better representation in the foreign market, increasing its global competitiveness.
All companies, regardless of size, are guided by governance, which is nothing more than ethics and transparency in management. In this way, all are influenced by ESG. One of the twenty principles analyzed in the ESG20+ Public Consultation, and also one of the most important, concerns the simplification of legislation so that small-sized organizations have better conditions to adapt to the regulations.
Often, in the current reality, small companies are unable to have a board of directors composed of professionals specialized in governance. However, it is important that the business owner or any other member of the board be able to study and understand the guidelines on their own. A thorough internal audit increases legal security, reduces the risk of fines, and prevents the company's image from being tarnished in the market. Regarding the major entities, the presence of one or more members specialized in ESG within the board of directors is essential.
The existence of criteria encourages companies to adopt practices that minimize impacts, promote social justice, and ensure transparency, resulting in sustainable and balanced economic growth. Recently, in an interview with the press, the CEO of Rede Brasil do Pacto Global ESG, Carlo Pereira, was quite assertive in stating that "ESG is not an evolution of corporate sustainability, but rather corporate sustainability itself."
According to recent data released by PwC, it is estimated that at the beginning of this year, 57% of mutual fund assets in Europe are in funds that consider ESG criteria. This corresponds to US$ 8.9 trillion. Another interesting fact, disclosed by the same institution, is that 77% of the institutional investors surveyed by PwC itself plan to stop purchasing products from companies that do not adopt good practices by 2027.
ESG20+
Anyone interested can participate with suggestions and opinions in the ESG20+ Public Consultation, which will be available until the end of this March. It is organized by the Global ESG Institute, the Brazilian Association of Institutional and Government Relations (Abrig), and the ESG Movement in Practice.
The interinstitutional initiative aims to establish environmental, social, and governance standards to guide public agencies, society, companies, and investors in Brazil. The goal is to simplify the application of ESG principles, as well as to establish unified criteria for measuring and disclosing practices.
