ESG in Latin America and the need for change

It seems that ESG is on everybody’s mind. The term refers to a set of corporate standards around environmental, social, and governance behaviour, with the goal of encouraging sustainability, transparency, and accountability at every organisational level. The movement is being driven partly by the United Nations’ 2030 Sustainable Development Goals (SDGs), but also by a change in public perception over the role that companies play in societal and cultural transformation. 

In the coming years, ESG will likely play a major role in the evolution of many of the world’s economies. The ESG framework is already gaining traction in Europe, North America, and East Asia; and governments and businesses alike are beginning to incorporate these considerations into the decision-making and risk management process for lenders, investors, and financial institutions. 

One region that has failed to keep pace with others is Latin America. Like much of the developing world, Latin America was devastated by the COVID-19 pandemic as its economic engines ground to a halt and civil unrest threatened the social infrastructure. Given that ESG will be a major factor in attracting international investment for the foreseeable future, the need for Latin American businesses to incorporate ESG principles is all the more pressing. 

In this series of articles, RSM’s specialists, Juan Pablo Montero, RSM Argentina; Oscar Bobadilla, RSM Columbia; Marcelo Conti, RSM Brazil; and Paola Piña, RSM Chile share their expert insights on the current state of ESG adoption in Latin America and what businesses can do to lead the change that is needed.