It’s not new that investments in an ESG approach (Environmental, Social, and Governance) have shown strong potential, but the fact is that the topic has been gaining momentum across the market as a whole amid the constant changes the business world has been witnessing.
In short, companies that integrate ESG into their operations tend to be better prepared for these shifts and, therefore, may be more profitable in the future—while also being ready for evolving production and consumption standards. After all, the ability to modernize and keep up with key trends without compromising business continuity is one of the clearest indicators of long-term success for companies in any sector.
Sustainability vs. Investments
According to a study by Itaú Asset, even the stock market value of companies that adopt ESG strategies increases, as they become more attractive and profitable to investors seeking safer long-term investments. The recent coronavirus pandemic brought sustainability concerns back to center stage, boosting awareness and highlighting the importance of putting ESG actions into practice rather than keeping them only in rhetoric.
According to Valor Data, a comparison between the Ibovespa (B3’s main index) and the ISE (the index of companies aligned with the ESG agenda) shows that the sustainability index performs better.
Genuine empathy is attractive.
Companies that show genuine concern for environmental trends and social well-being—and that actually take action—build a positive image and reputation in the market and become more attractive, strengthening and deepening their relationships with the public, employees, stakeholders, and customers.
A recent study by Union + Webster found that 87% of Brazilians prefer to buy products from companies with sustainable practices. In addition, companies that embrace ESG tend to be viewed more favorably by employees and suppliers, who increasingly value the workplace environment.
The ESG landscape in Brazil
The numbers are promising and show clear progress in Brazil. Of the 750 companies included in Forbes’ “Best For The World” ranking—which recognizes businesses with positive impacts on society and the environment—39 are Brazilian.
One of them is Natura, recognized for a range of initiatives in Brazil, such as “Amazônia Viva,” which aims to conserve 2 million hectares of the Amazon rainforest through multi-million investments; the “More Beauty, Less Waste” program, focused on waste management; and the “Every Person Matters” cause, which promotes diversity and inclusion. Another standout is Grupo Boticário. The company’s ESG agenda includes socio-environmental commitments through 2030, aiming to map and address 150% of all solid waste generated across its production chain (its own waste as well as that of suppliers and customers) and to reduce social inequality for 1 million Brazilians.
Overall, these figures indicate that Brazil is making significant strides in ESG, with companies setting ambitious targets and implementing sustainable actions across their processes—attracting investment and creating a competitive advantage in the market.
