It may seem complex, it may seem like it’s only for large companies, but ESG is here to stay anywhere
We need to restore Europe’s forest fabric and conserve it
Have you heard of the European Green Deal? It is the European Union’s (EU) strategy to achieve climate neutrality by 2050 by fulfilling the commitments made under the International Paris Agreement.
And how does this translate into our daily lives in Portugal?
It is more than necessary to make the transition to a modern and competitive economy. And that means for companies – whatever their segment – to go beyond what is written in the law. It is to promote the practical application of ESG – three letters that have come to change our way of thinking and acting – Environment, Social and Governance – that is, environment, social responsibility and governance.
The EU’s Nature Restoration Act passed in February by MEPs awaits final approval from EU member states for the legislation to come into force. It mandates the restoration of a minimum of 20% of land and sea areas in the EU by 2030, with the aim of restoring all affected ecosystems by 2050. Currently, 80% of European habitats need to be restored.
The first step is executive management involvement
ESG goes beyond environmental impact
If environmental advancement is essential, how do you start implementing an ESG policy? How much does it cost? Who needs to be involved in the organization? The starting point is that there is the will and determination of the executive board.
It is also important to clarify that an ESG policy can be implemented regardless of the size and sector of the organization – whether it is private, public or a non-governmental development institution.
Informa D&B Portugal recently released its ESG Score indicators. In the document, the consultancy highlights that “The environmental, social and governance practices of companies will be increasingly scrutinized, due to the growing political and social pressures and demands and the existence of more and better monitorable data”.
Informa D&B Portugal discloses its ESG Score
In InformaD&B’s ESG Score, the Environmental (E) indicators involve energy/water management, carbon intensity by sector of activity, public incentives for environmental protection. The Social (S) indicators involve labour relations and diversity, delinquency risk assessment, incentives for social inclusion and employment. And finally, the Governance indicators (G) involve management diversity, business transparency, resilience indicator and family business indicator.
So, it’s very complex to start with – and my business is small…
The amazing thing about the application of ESG is that it is possible to start small. A corporate social responsibility project – as a recurring support to a philanthropic institution with participation in management. Or, an equity policy focused on human resources. Or, an analysis of governance and process improvement.
The benefits are immense
The first step is to recognize that there is a way to go and there are experts in different fields to support the organization. And communication goes hand in hand in this process, as it involves internal and external conversations, relationships with different audiences, and political approaches.
So, don’t wait for your business to grow to start the ESG process. Get started soon!
