In recent years, ESG (Environmental, Social and Governance) has stood out as an essential factor in generating value, both for consumers and investors.
In a recent study conducted by EY, it was revealed that ESG influences 99% of investment decisions in Brazil.
In a scenario where ESG dimensions have become more than necessary in the global corporate world, committees play a leading role in directing companies' strategic decisions.
As the ESG movement continues to gain momentum around the world, it is important to be aware of the trends and observations that deserve our attention in the coming years:
1. Adoption of cloud technology for purchasing
The adoption of cloud technology (cloud computing) to manage purchasing processes has proven to be an effective strategy.
This results in transparent business relationships, improves regulatory compliance and reduces energy consumption by eliminating the need for costly IT infrastructure.
Transitioning to the cloud is aligned with sustainability principles, making it a smart choice for ESG-committed companies.
In addition to the benefits already mentioned, adopting cloud technology also offers significant advantages in terms of agility and efficiency.
By migrating to the cloud, companies can scale resources quickly and flexibly, adapting to fluctuations in purchasing demand.
This results in more agile and effective processes, allowing organizations to respond more efficiently to changes in the market and customer needs.
2. Continuous assessment of ESG risks
The global landscape is full of uncertainties, from inflation and the cost of living to political instability and climate change.
ESG committees also play a key role in constantly monitoring the impact of the company's operations on environmental, social and governance issues.
This involves collecting data and analyzing key performance indicators (KPIs) related to issues such as reducing carbon emissions, diversity and inclusion in the workplace, and corporate governance practices.
ESG impact monitoring allows a company to assess its progress towards sustainable goals and identify areas for improvement.
All of these factors can significantly impact business and investment, so ongoing assessment of the risks associated with these elements is essential.
ESG committees must be prepared to deal with turbulence and develop risk mitigation strategies.
3. Employee well-being and organizational culture
The importance of employee well-being has gained prominence in recent years.
Addressing communication issues, listening to employees’ needs, and promoting their physical, mental health, and social well-being are all measures that can strengthen workforce cohesion.
Companies that prioritize employee well-being often experience greater staff satisfaction and increased productivity.
Focusing on employee well-being not only strengthens team cohesion, but also contributes to the development of a positive organizational culture.
Companies that care about the well-being of their employees often promote values such as empathy, respect, inclusion and mutual support.
This creates a healthier work environment where employees feel valued and encouraged to contribute their ideas and efforts constructively.
4. Sustainable supply chain management
Supply chain resilience is critical to business success, especially in a world where risks are multifaceted.
ESG committees should focus their efforts on reducing risks, reviewing integration policies and expanding the diversification of the supplier base.
Sustainability must be integrated into the process, making the supply chain more resilient and responsible.
Another key aspect of supply chain management related to ESG committees is traceability and transparency.
To ensure compliance with ESG principles, it is essential that companies can trace the origin of their products and raw materials, as well as the working conditions and environmental practices of their suppliers.
Implementing transparent tracking and reporting systems helps identify and mitigate risks associated with suppliers who do not meet ethical and sustainable standards.
5. ESG disclosure for the corporate market
New annual corporate disclosure rules on governance, compliance, environment and society are becoming legal requirements due to growing market demand.
Companies that adopt comprehensive sustainability approaches and communicate effectively with global financial markets are better positioned to attract ESG-conscious investors and achieve sustainable long-term performance.
Effective ESG disclosure not only attracts ESG-conscious investors, but can also open doors to access sustainable capital.
Many funds and institutional investors are incorporating ESG criteria into their investment decisions and allocating capital to companies that demonstrate a solid commitment to these principles.
Thus, companies that excel in ESG disclosure may have access to more favorable financing and reduced capital costs.
In short, ESG is a trend that is here to stay and continues to shape the world of investment and business.
As we approach 2024, companies that adapt and respond to these trends will be in a stronger position to thrive in an increasingly ESG-driven investment environment.
See you next time! 😉