How can ESG criteria be promoted by companies?
09 Jan 2023
ESG (Environmental, Social and Governance) criteria refer to the environmental, social and governance factors that companies take into account when investing and making decisions. In recent years, sustainability has leapt to play a major role in companies and even more so during the pandemic, with 65% of consumers expressing concern about this aspect. In this context, there is a great need for ESG factors to be promoted as a strategic factor to be addressed at the highest levels of decision-making, in order to develop companies capable of generating value and bringing together short and long-term vision.
So what can organisations do?
When considering sustainability and ESG factors, there are some aspects that any organisation should take into account.
- Key role of the Board. Sustainability cannot be an afterthought, but must depend on the highest authority, the Board of the companies, to obtain the recognition and relevance it deserves.
- Principle of transparency. Sustainability without transparency loses much of its essence. Therefore, decisions must be taken to create reports and provide clear information on the company’s activity in this area. This is the only way to avoid actions such as Greenwashing, which discredit the actions and efforts of other companies that work and invest in their sustainability plans.
- Corporate culture. As we said before, consumers are increasingly concerned about sustainability. Therefore, including it within the culture and purpose of the company will help to create a great positioning for the company, transmitting confidence to its customers. Integrating this aspect into the culture must be done at all levels, both internally (processes, operations, etc.) and externally (suppliers, partners, etc.).
- A new way of understanding Boards. In order for this governing body to be able to really orientate strategy towards best practices, change its focus and adapt to the environment, a change in the skills of its members will be necessary. The search is therefore on for profiles with a range of expertise, from sustainability to governance, who are well informed about the context in which their companies operate at all levels (social, political, regulatory, etc.).
ESG criteria in the long term
Concern for this type of criteria permeates all sectors and companies, affecting the way in which decisions are taken and representing a major differential factor in the long term, which requires Boards to include among their responsibilities that of ensuring sustainability, reducing their environmental footprint and monitoring their impact on the social and governance level with respect to the environment. For this to be real, sustainability will have to permeate the way we manage people, communication, strategy and, of course, innovation and the use of technology. In VASS we work to find solutions that support these type of projects from technology applied to sustainability, putting innovation at the service of the environment, society and the governance of organisations.