The acronym ESG, or ASG according to its translation into Spanish, has permeated business culture to the point that it is beginning to be inescapable. And with good reason: despite having emerged in the seventies, they have grown in importance due to the constant awareness about climate change and social revolutions.
Companies around the world face challenges to achieve sustainability and evolution, and adopting ESG criteria is certainly one of them. But what exactly are they, and why do companies need them?
What are ESG criteria?
These are factors that make a company sustainable and ethical based on its environmental, social and good corporate governance commitment, without ignoring the financial aspect; its pillar is responsible investment, which obeys the principle of greater profitability.
The environmental criterion covers the actual and potential impact of companies on the environment. The social criterion covers the consequences of business activity on communities in terms of health, human rights or diversity. The corporate governance criterion asia mobile number list analyses the link between management and shareholders, as well as the way in which the boards of directors are structured or the terms of transparency.
What are its benefits?
The application of ESG criteria to companies has brought results such as cost reduction (75% of respondents), improved performance of their investment portfolio (72%) and new growth opportunities (79%), according to data from Dun & Bradstreet.
By 2024, according to Bloomberg data, investments in sustainable assets have reached $5.5 trillion globally. This growth reflects the growing recognition that sustainable practices are not only ethically desirable but economically advantageous.
How to adopt ESG criteria in Latin America?
Adopting ESG criteria in a company in Latin America may seem like a challenge, but it is an achievable and valuable process that can drive both sustainability and business success. Below we provide a step-by-step approach to integrating these criteria into your company.
1. Initial Assessment and Commitment
- Diagnostic : Conduct an initial assessment to understand the current state of your company in terms of environmental, social and governance practices, which will allow you to identify areas for improvement and opportunities. In Latin America, CIAL Dun & Bradstreet offers a rigorous self-assessment, which combines external data sources and is normalized with an analytical model to generate a rating. For more information, click here.
- Senior Management Commitment : Ensure senior management and board commitment. It is crucial that company leaders are aligned and actively support the implementation of ESG criteria.
2. Definition of ESG Objectives and Goals
- Goal Setting : Define clear and achievable goals in each of the three ESG pillars. These goals should be specific, measurable, attainable, relevant and time-bound (SMART).
- Integration into Corporate Strategy : Ensure that ESG objectives are integrated into the company’s overall strategy and not treated as isolated initiatives.