ESG on the Institutional and Government Relations agenda expands the vision on the defense of interests and reinforces the area's importance for companies and associations.
In the agenda of conscious capitalism, it is increasingly valuable for businesses to follow socially responsible standards that grant recognition to organizations that act ethically and responsibly, take care of the environment, and generate positive social impact in society.
What is ESG?
The acronym for Environmental, Social and Corporate Governance (ESG) refers to best environmental, social and governance practices.
The term ESG emerged in 2004, in the publication Who Cares Wins, by the UN Global Compact in partnership with the World Bank. At the time, financial institutions and international organizations debated the need to integrate social, environmental and governance factors in financial evaluations as conditions for companies to acquire investments and capital.
In other words, ESG begins to be seen as advanced risk management (mainly financial), bringing to corporate sustainability the perspective of the financial sector based on these three main criteria: environment, social and governance.
How does ESG relate to GovRel?
In this context of citizen responsibility, companies need to get closer to their stakeholders or interested parties to understand the positive and negative impacts that their businesses generate in society and create action plans to minimize negative effects and maximize positive ones.
There is a new demand from the market and society as a whole for companies to use their political and social capital on topics of great relevance to society. There are international criteria, metrics, rankings and reports that demonstrate how much companies comply with and meet ESG best practices, and this contributes to the transparency of the actions of the corporate world and predictability for investors/shareholders, the public sector, employees, the community, consumers and suppliers.
From the point of view of Institutional and Government Relations, an area highly specialized in risk and opportunity management, scenario analysis, dialogue with the public sector and strategic action with stakeholders, ESG trends show themselves as an opportunity to advance in the materialization of risks and opportunities with actions that strategically address the financial needs (such as the search for new investments, market gain) and reputational needs (such as communication, marketing, lobbying, advocacy actions) of the organization.
Are you having trouble defining indicators or KPI's in GovRel?
Showing the business how the area's actions impact from a financial perspective on crisis and risk management related to social, environmental and governance issues can be a great first step.
In the end, ESG principles broaden the vision regarding the defense of interests, reinforcing the importance of GovRel areas acting in a transversal and multidisciplinary way in the organization in favor of business sustainability and the generation of positive impacts for society.
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References
Is ESG a concern that's keeping you awake? Relax, nothing has changed
Understand what ESG is and why the acronym became a fever in the business world
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