ESG: 78.4% of Brazilian companies have already adhered to the agenda, points out UN Global Compact

A survey carried out by the United Nations (UN) Global Compact in Brazil reveals that 78.4% of companies in the country have already adopted the ESG agenda. This is the acronym fornvironmentalsocial and governance, which in Portuguese means environmental, social and governance. This initiative represents a set of practices and policies that companies can adopt to promote sustainability and social responsibility in business.

The study also points out the main reasons why organizations adopt the ESG agenda in their operations. Among the main reasons is the concern with environmental impacts and the promotion of a sustainable economy. However, the survey shows that for 70% of the companies the greatest impact has been on reputation and image, as explained by the knowledge manager of the UN Global Compact in Brazil, Gabriela Rozman.

“This is due to the fact that consumers are now demanding more than products, services, (companies) that are not solely and exclusively profit-oriented, but that also make a socially and environmentally responsible contribution”, says Rozman.

One of the companies in the food industry that is concerned with sustainability is the Brasilian business Food Flow. The company, opened three years ago, was born with the purpose of sustainability as one of its main pillars. The CEO of Food Flow, Carlos Victor Mendes, explains that the company came up with the idea of ​​avoiding food waste. It works as follows: through the application, the customer chooses meals and foods that are close to expiry date, and get a discount of at least 50% for the product. Mendes explains that concern for the environment is also a competitive advantage for business.

“This allowed us to develop a company with great potential, with immense scalability value, where we manage not only to make people aware of the importance of combating waste, of the importance of sustainability, but also to show society that sustainability is the time, it’s what we need and that brings competitive advantage to any business”, says the company’s CEO.

mindset change

Although companies that do not adopt this practice report not having suffered negative impacts for this reason or sanctions (67.4%), the survey shows that this scenario may be changing. Among the interviewees, 8.9% reported having lost business or consumers, 4.2% lost market value and 3.7% had difficulty accessing credit lines. The most pronounced negative impact was the lower engagement of employees and the difficulty in attracting talent (13.2%).

“Although we observe these changes, they are still small, however. We need more ambition on the part of companies to transform reality, new technologies, innovation and a more collective and less individualistic culture. There is still a lot of room for us to evolve”, says Rozman.

According to another survey on the subject, conducted by the National Confederation of Industry (CNI), around 85% of Brazilian industries have already adhered to or intend to implement ESG criteria in their production processes. The survey was carried out with a thousand entrepreneurs in the sector.

Entrepreneurs who said that the adoption of these criteria is not part of the strategy or is not planned for implementation in companies correspond to only 13% of respondents.

Another important data revealed by the survey is that nine out of ten entrepreneurs consider the ESG criteria very important for their business. In a survey carried out in 2021, about eight out of ten businessmen had the same opinion on the agenda.

The survey also points out that around 65% of industrialists indicated as a first or second option that social initiatives, related to the social impact on the community, are the most important for their companies.

What is the ESG agenda

According to the professor and coordinator of the Post MBA in ESG at COPPEAD at the Federal University of Rio de Janeiro (UFRJ), Flávia Maranho Ponce de Leon, the term ESG was mentioned for the first time in a 2004 publication of the UN Global Compact in partnership with the World Bank, called Who Cares Wins.

“It arose from a provocation by the UN secretary general, Kofi Annan, to the 50 main financial institutions in the world to reflect on ways to integrate environmental, social and governance factors in the capital market”, says Leon.

According to Leon, in many situations, the concept of sustainability – which deals with the system comprising the environment, society and economy in an integrated manner – has simply been replaced by the acronym ESG, which translates a business perspective on this system.