ESG guides business amidst global transformations

Heat waves, increasingly prompting weather service alerts, severe extreme weather events, the conflict in Ukraine and Russia, and offensives in the Middle East—these and many other news-dominating episodes are a reality in the daily lives of the global population, with repercussions for businesses, corporate strategies, and the workplace dynamic. As a trend, there is a strong recommendation that ESG practices be applied to consolidate, over the coming years, global actions for environmental, social, and governance sustainability.

ESG practices established in global companies have served as a reference for Brazilian organizations in the process of implementing the concept. "Today, 80% of global corporations understand that sustainability is a strategic priority, and 75% are seeking ESG-skilled professionals to fill leadership roles," observes Aline Oliveira, director of IntelliGente Consult, a consulting and mentoring firm specializing in business strategies, programs, and projects. "As a cross-cutting theme within corporations, generating connectivity between professional teams and interrelation in goals, ESG has broadened business and opportunities, from sustainable portfolios and products to new markets and increasing national company interest."

In Fernanda Toledo's view, CEO of IntelliGente Consult, ABNT PR 2030 is an important first step for Brazilian organizations seeking to align with ESG goals. "And there's a new ISO standard, IWA 48:2024, that specifically addresses ESG," she highlights. Among other points, the ISO considers metrics that ensure female participation in senior management and representation of diverse social groups among employees.

According to the executives, the primary immediate transformation for national organizations, requiring action even in 2025, is adapting the company's ESG indicators to financial indicators and, in this way, connecting ESG goals with the IFRS S1 and IFRS S2 standards, which define "general requirements for the disclosure of financial information related to sustainability." These rules were developed by the International Sustainability Standards Board (ISSB) and are part of the International Financial Reporting Standards (IFRS) framework.

The standard S1 was created to provide a framework "Globally consistent and comparable for the disclosure of financial information related to sustainability," explains Aline Oliveira. Standard S2 links financial statements to climate change. Starting in 2026, publicly traded companies will be required to incorporate IFRS standards.

In the Supply Chain, Scope 3 (suppliers), according to Fernanda Toledo, will be crucial for demonstrating IFRS S2 results. "There's an important process regarding the carbon footprint. Therefore, it is recommended that companies also include Scope 3 assessment in this process, which will be increasingly required. Companies already paying attention to this are publicly traded, listed companies, and are subject to financial market demands."

Regarding Human Resources, executives are observing shifts in the work model, which is undergoing transformations and is shaping up as an important trend for ESG in 2025.

According to them, it's crucial to highlight the presence of Generation Z in organizations. "This generation, born between 1997 and 2010, has a different view of the business model; they link work to purpose, understand that companies should focus more on the physical and mental health of employees, and prioritize quality of life. As relevant points, they value flexible schedules, flexible work models, and the use of artificial intelligence," emphasizes Aline Oliveira.

Beyond 2025, in Fernanda Toledo's view, companies need to be prepared for the "aging" of Generation Z and the fact that this group, predominantly, is choosing not to have children. "At some point, this 'pyramid' will invert. Therefore, it's essential that organizations begin working with different models going forward, which also include older employees. We need older professionals to bring tranquility, planning, and business knowledge."

How does ESG affect Brazilian small and medium-sized enterprises (SMEs)? Larger, more structured organizations have a two- to three-year timeframe for ESG strategies to start generating profits and benefits. "Generally, SMEs don't have the cash flow to invest in something that will yield a return in the medium term," observes Aline Oliveira.

But for specialists, SMEs are already taking their first steps in light of ESG's importance, gradually integrating purpose-driven initiatives as a competitive strategy to differentiate themselves. Conversely, organizations needing to adapt their supply chains are also seeking smaller companies willing to adapt.

Beyond forging partnerships and seeking access to government and private incentives, SMEs are increasingly creating transparent reports on their practices, demonstrating ESG concepts in their actions that have internal and external impacts on the communities they operate in. "For example, some are already managing waste and energy efficiency, with material reuse and the use of green economics," says Fernanda Toledo. "But ideally, they should intensify their initiatives so they can structure themselves going forward," she emphasizes.

While ESG practices are not mandatory under regulation, executives argue that the global trend is for companies to adapt to environmental, social, and governance sustainability actions. "In fact, we're internationalizing some ESG norms. We recently had the G20 meeting, highlighting the Global Alliance Against Hunger and Poverty, with countries committing to SDG (Sustainable Development Goals) targets. In this context, companies must necessarily be compliant and adapted," says Aline Oliveira.

By 2030, studies indicate that approximately 75% of global companies will need to formally implement ESG practices, driven by regulations, market and consumer demands, and pressure from stakeholders"So, we're facing a path with no turning back," ponders Fernanda Toledo. "It's urgent that companies adapt in an organized way, taking one step at a time and relying on a specialist to guide them through every stage of the process," concludes the IntelliGente Consult executive.