The inclusion of environmental, social, and sustainable governance (ESG) within organizations has become crucial in recent years, as the market, consumers, regulators and investors are increasingly looking for companies that are concerned about the environmental and social impact of their operations and that generate value for their stakeholders, without ever neglecting the financial aspects of the company.  

Organizations with a sustainability-focused agenda operate according to a strategy that takes into account these pillars: economic, social, and environmental. The need for the pillars of the environmental, social, financial, and corporate governance systems in which the organization operates and which can be relevant to the business in a practical and actionable way, in order to obtain the desired results. 

Such is the relevance of ESG criteria globally, that they have been the basis for sustainable investment or SRI, in which external investors evaluate the performance and risk of a company based on a series of indicators of compliance and performance of these criteria, which has led to the need for companies to manage the environmental, social, and good governance pillars and to adequately communicate their actions through sustainability reports.

Additionally, including ESG criteria helps organizations to better manage their risks and identify opportunities for sustainable growth. By focusing on sustainability, companies can improve the efficiency and resilience of their operations, reduce costs, increase profitability and enhance brand image. In addition, including ESG factors in business strategy helps organizations attract and retain sustainability-conscious talent, investors, and customers.

How can companies incorporate ESG issues into their strategy and daily operations?

Environmental issues: The environmental impacts of the company must be identified and measured. It is important to consider the use of natural resources, greenhouse gas emissions, air and water pollution, among other factors.

From there, environmental goals and objectives can be established, an action plan can be defined to reduce the company's environmental footprint, and performance indicators can be established to evaluate progress. Companies can also consider implementing circular economy practices, such as waste reduction, reuse, and recycling of materials.

Social: This involves consideration of the company's social impacts on its employees, local communities, and other stakeholders. This can be done by conducting social impact assessments and setting social goals and objectives.

The company can also work on initiatives to promote diversity, inclusion, and equal opportunities, as well as the health and safety of its workers. The development of projects that generate shared value in the different stakeholders, and that stimulate participation in the local community and collaboration with non-governmental organizations can be effective practices to involve stakeholders in the company's responsible social management.

Governance: Incorporating governance issues into a company's strategy and day-to-day operations has to do with the implementation of sound and ethical corporate governance practices. This may include the definition of clear and transparent policies and procedures, the implementation of monitoring and control systems, and the promotion of an organizational culture of responsibility and ethics.

The company should also consider the involvement of the board of directors and the establishment of independent audit committees to ensure transparency and accountability. Implementing transparent reporting and disclosure practices on ESG issues can also help the company improve its performance over the long term.
We can ensure that organizations that do not include ESG risk being left behind in an increasingly sustainability-conscious world and face financial, legal and reputational risks. Including ESG criteria in strategy and operations is an imperative for companies seeking to ensure their future sustainability in an increasingly sustainability-conscious world by sustainably managing their financial, legal and reputational risks.


Key Contact