Keep an eye out: Investors are putting more factors into the balance when making choices
One of today’s most famous acronyms, ESG (Environmental, Social and Corporate Governance Sustainability), has tripled search interest in Brazil in the last year. The term was coined in 2004 by the United Nations with the aim of involving companies in the adoption of principles on human rights, labour, the environment and anti-corruption, in collaboration with the World Bank.
Financial, technology and other industries and companies are already taking the first steps in this direction. Some organizations have even developed projects. But why is it important for small and medium-sized enterprises to start investing in this concept?
Today, companies around the world have already made it clear that they no longer evaluate only the financial performance of their partners, but also their social and environmental results, with ethical and transparent governance.
A Bloomberg survey estimates that the ESG agenda is expected to attract $53 trillion in investment by 2025. In other words, in addition to becoming a trend, adapting to the model is increasingly becoming a prerequisite for competitiveness.
Investors bring new factors into play
In this scenario, trading is already something that goes beyond fundamentalist multiples, profits and income, debts and liabilities. Investors are putting more factors into play when making choices. This escalation has been further spurred by the coronavirus pandemic, forcing companies to accelerate the ESG agenda.
Market experts point out that companies that invest in this sense are more resilient during times of crisis. Businesses with good practices are even less likely to face legal and labor issues, fraud, and suffer lawsuits due to environmental disasters.
According to a study by La Maison consultancy Walk The Talk, 94% of Brazilians expect companies to do something about ESG and believe that organizations have an obligation to solve problems in this area. However, when asked, only 17% believe companies actually do this.
The biggest expectation: environmental issues
Environmental issues occupy a large part of the expectations of Brazilians, who expect companies to take care of nature, whether by modifying products and services to make them better from an environmental point of view, or by not testing animals or producing better packaging for the environment .
In 2021 Natura was the company most associated with ESG, with 536 points, in an index with a maximum score of one thousand. Unilever appears immediately after, with 389, followed by Ypê (386), Boticário (376), Petrobras (372), Nestlé (354), Banco do Brasil (335), P&G (332) and Coca-Glue (315).
There are various indices and models for assessing good ESG practices, but caring for the planet in various areas is already part of the collective imagination, it is a trend with no return. Investors and consumers are no longer willing to deal with agendas outside this context and, although this is not yet a consolidated reality for small and medium-sized entrepreneurs, joining the wave now could make all the difference for moving forward in the coming years.
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Source: Terra
