At a global level, the ESG management model is gaining relevance due to the efforts of companies to comply with environmental, social and governance aspects, or offer an opportunity for companies to rethink their strategies and objectives.
Although it is widely recognized at the economic and business level, many experts consider that there is no single model, as there is a diversity of business lines where this model can be applied and each of its criteria will require specific attention. What works for one company may not work for another.
ESG criteria
In line with the ESG model, there is also talk of ESG Criteria or ESGThe “investment risk management system” is the set of rules or guidelines that a company or investor must follow when weighing business decisions, in which all possible investment scenarios, both positive and negative, must be observed and studied. Projects in which an investment is feasible and those in which it is not.
It can be said that ESG criteria remain in transition, which responds to a specific strategy for each company. The management of Environmental, Social and Governance (ESG) factors is fundamental to add or maintain the value of organizations.
Environmental criteria
They relate the company’s activity and its impact on the environment. It studies and evaluates the consumption of energy, water and other materials, as well as monitoring other aspects such as the level of carbon dioxide emissions, the use of renewable energies and energy efficiency. Compliance with environmental criteria is increasingly valued as efficiency and transparency.
Social criteria
It deals with the company’s relationship with society, employees, shareholders, customers, communities in its areas of influence and all those who collaborate in the production line, such as suppliers.
These criteria are very broad, as are the target groups. These may be employee programs, with an emphasis on gender equality or the family, or training programs. Programs for communities are aimed at meeting specific needs, such as health, education or cultural needs. Social commitment improves the image and perception of the company.
Good governance criteria
It includes the way in which the company is managed and compliance with external and internal rules and regulations. It functions as a protection mechanism for investors and for all those who could be affected by decisions made at the corporate level. A company with good corporate governance is a benchmark for transparency and best practices.
Although the ESG model was applied in the context of large companies, today environmental, social and good governance commitments are addressed in small and medium-sized companies, as part of the responsibilities that the company must assume, both for its investors and its employees, to generate value and promote sustainability.
