Environment Day and the impact of sustainability on business

ESG: right next to several others that permeate the corporate environment, it is quite likely that you have come across the new acronym in the last two years. The theme quickly gained space in meeting rooms, events and training programs in companies, although it is not exactly a novelty.

In the end, leveraged by the urgency signals emitted by our own planet, the term wraps negotiations around an old need: sustainability. With the pillars of Environment, Social Responsibility and Governance, ESG systematizes corporate initiatives aimed at the three areas through metrics.

But, with all the news and brand positionings seen recently, is it already possible to consider ESG as a reality?

According to a study conducted by the FSB Research Institute, the answer is no. The survey showed that despite understanding the relevance of the topic, 60% of the companies interviewed still do not have strategies aimed at sustainability. Meanwhile, only 3% of companies link their executives’ compensation to socio-environmental goals.

In the spirit of World Environment Day, nothing better than showing what is to come in relation to the impacts of corporate sustainability.

Check out the three trends that, in different ways, should impact all business segments in the coming months!

Corporate sustainability trends

1. Brand positioning

Brands of different sizes and performances raise sustainability as a flag through communication – that’s old news – and it wouldn’t be different with ESG. In 2020, a study carried out by IBM revealed that consumers questioned in the survey were likely to pay up to 35% more for truly sustainable products.

On one hand, post-pandemic consumers with a growing interest in consumption and increasingly demanding more than the differentials of products and/or services. On the other hand, companies that perceive the opportunities of a brand based on ESG principles.

It looks like a mathematical operation, and with a positive result. However, the equation is not always exact.

The entire management of a brand involves the way the company is perceived, and in a world of transparency and social media, greenwashing is increasingly a path of no return towards the image crisis. The concept is related to companies that appropriate marketing strategies aimed at sustainability that are not consistent with company practices.

There are already many cases of organizations that try to position the company in a social and environmental bias, but that end up with extremely negative results from the moment a reality different from the one communicated is exposed.

The scenario shows the importance of truthfulness in any ESG-oriented initiative, which must always start in the management of the company – to then be part of a disclosure to the external public. After all, identifying negative corporate impacts and realigning processes can require a long journey of institutional maturity, which goes from changing established standards to educating employees and the production chain.

For those companies that already feel ready for a sustainable positioning, it is essential to leverage brand monitoring and Business Decisionning in favor of the company. Having real-time data to assess the acceptance and repercussion of each brand communication will make a difference in dealing with any image crisis.

Furthermore, it is important to always remember that every company that has a vast production chain must consider that the attitudes of its outsourced workers can also reflect on its brand perception – often culminating in an indirect crisis that needs to be monitored.

2. Financial opportunities

Whether due to the appreciation of sustainable brands, the eminent carbon market or the countless new business fronts that will still emerge in the so-called clean economy, it is a fact that the world based on ESG also brings several financial opportunities as a trend.

Only regarding the purchase and sale of carbon credits in Brazil, according to estimates by the International Chamber of Commerce (ICC Brasil), the Brazilian potential for generating carbon credits is in the range between 80 million and 1 billion tons of CO² by 2030, which can bring revenues of up to US$ 100 billion.

Another example is that, in eventual mergers and/or acquisitions, companies with high metric and certified ESG standards achieve greater equity.

The strong trend for the upcoming months shows the enormous potential for those who are educating themselves to understand what place they can occupy in this new clean economy and how they can contribute to it – while the potential for a sustainable and profitable business is immense.

3. Social impacts

The first two trends already show the opportunities – and risks! – effectively moving companies towards an economy with a positive environmental impact. Now, as a third and fundamental pillar to be prepared for is the social reflection of a structural change of such dimension.

In a complex issue with global impacts, it is essential to look beyond corporate walls to deeply understand the social consequences of the energy transition that is projected.

The S on ESG can be understood and practiced in different ways, including internal actors – collaborators – and external actors – vulnerable groups.

One trend among the countless ways to apply a positive social impact is the understanding that economic changes from a polluting context to a clean economy raises several financial opportunities, but can also reflect on unemployment and even more vulnerability for many.

As a practical example, a large corporation that has a large workforce specialized in vehicle maintenance, when migrating to an electric fleet, will naturally also need professionals prepared for the new technical specifications. In this context, there are essentially two paths: changing personnel, taking jobs from the majority who are not yet ready for the sustainable energy transition. Or, for those that already focus on the social pillar, design a training strategy for their own teams.

Whatever the trend to be followed, above all the main thing is to understand that, if the company exists, it has an environmental and social impact – whether positive or negative.

Understanding what consequences corporate processes are causing is the first step to adjust what is necessary and make the difference that the planet needs – and your company too!