ESG: what is it and how does this business management work?
It is not new that the Companies have a social function both for the economic vector and for the cultural development of a country and its population, and that is why knowing what ESG is and what practices of conscious capitalism with which this acronym relates makes all the difference in the modern business universe. Despite being nothing new, established businesses that evolve from headquarters in a sustainable way have taken more space and space every day. And what does Clicksign have to do with it? Everything! But we tell you during the text about our role in this scenario. Are you coming with us?
After all, what is ESG?
ESG is an acronym, in English, for Environmental, Social and Corporate Governance, and it basically concerns environmental, social, and governance guidelines (in Portuguese) that a business chooses to implement.In other words, ESG is nothing more than a set of standards that aim to define the way in which a business activity is managed - in a sustainable way -, and it is essential that for this purpose its three pillars be followed:
1. Environmental
The acronym “E” refers to business practices related to environment, and at this point companies must act protectively and not harmfully on issues such as:
- global warming and carbon emissions;
- deforestation;
- biodiversity;
- energy efficiency;
- waste management;
- scarcity of water;
- air and water pollution.
Of course, not all of the company's activities have a direct influence on all of the issues mentioned above, but indirectly we are all in the same boat. In addition, be careful with some of them - such as the adoption of a business culture Paperless Pela digitization of documents — it is already quite efficient in having a positive impact on the environment.
2. Social
It is also essential that the company be socially engaged, and at that point the range opens up more and your business will most likely fit more than three of the good practices that we are going to list (if not, rethink your business activity and adapt it):
- the customer experience has a social impact;
- What is the turnover rate of your business?
- What is the public positioning of the company about public and human rights issues?
- the data protection and privacy of customers, suppliers and of the business itself is a matter of good social practice;
- The policy of diversity of your work team shows that your business works with society;
- engaged employees they make the company better;
- Do you respect the labor laws and the protection of the human rights of its employees?
- And the relationship between your business and the community, how is it?
3. Governance
In Portuguese, governance refers to the administration of a company by its managers and directors, and these are the highlights:
- financial and accounting transparency of the company;
- complete, honest, and legal financial reports;
- What is the The company's relationship with the government and politicians?
- What are the company's investments for prevent cases of corruption, harassment, discrimination, etc?
That said, good business practices must be adopted by those who embrace the cause of ESG, and this comes from the companies' boards of directors to their products and services offered, as well as the past message. green entrepreneurship it doesn't just exist to look “pretty on paper”, but to be truly implemented by companies as a growth policy and also to protect the world in which we live, and that's why ESG has become a kind of corporate social and environmental responsibility certificate.
What is the origin of the acronym ESG?
When we said it wasn't news from yesterday, we didn't lie. The first appearance of the acronym ESG occurred in 2005 in a report entitled “Who Cares Wins”, that is, “Who cares”, and it is logical that, based on the conceptualization we brought to you, its implementation could only be an initiative led by the United Nations Organization.
What is the importance of ESG in the business environment?
Nowadays, it is certainly almost impossible to ignore this trend of change proposed by ESG, and this is not because, oddly enough, people are afraid of the end times, but, in fact, because Sustainable businesses are, admittedly, the most stable and profitable in the short and long term.Consider the case of the pandemic: companies that did not have system automation and did not invest in the digitalization of processes (for the implementation of the home office) experienced firsthand what it means to not have well-planned social management. And who didn't have a digital signature, how did they close deals? In addition, with good ESG practices, the risks of legal, labor, and even budgetary problems are reduced. In addition, your business score increases and so does the satisfaction of your customers and employees.
How to implement ESG in companies?
Between the lines we have already given some tips for the attentive, but we believe it is essential to quote one by one for you:
- Identify The bottlenecks of your business;
- define the strengths of your business activity;
- Implement a integrated ERP management system (because you will need to have uncomplicated access to all business data;
- map the social and environmental impact actions that can be implemented using ESG;
- define through which strategies they will be applied;
- implement as much as possible;
- track, redo, realign, and always improve ESG results through system integration reports
So, will it still continue with contracts made available on paper and signed in pen? Do you really believe that historical documents — of the future — derived from great business innovations will they have these characteristics? If it depends on ESG, we don't think so. How about adapting and growing with our tips?
