Participating in today’s economy includes opportunities in Sustainable Finance projects and ventures.
On the other hand, a sustainable company is no longer an option, it is a rule of survival; all stakeholders of the companies are paying more attention and making decisions taking into consideration the management of social, environmental and governance aspects of the companies.
A few months ago, I became certified as an «advisor*» in Sustainability and ESG (Environmental Social and Governance) standards; my particular interest is to focus on the direction and management of sustainable investments with ESG standards.
My first conclusion – even though I wanted to take my ego out of the discussion – was that I had already incorporated in my DNA to make personal and professional decisions based on sustainability criteria – to think about business continuity in the long term taking into account the different stakeholders in the project, for example -, that is to consider the impacts on the environment, as well as the interests of collaborators and the community when making decisions, among others; the certification allowed me to validate my frames of reference, which gave me peace of mind and tranquility to address current and future challenges. – in addition to the clear conscience of having been performing «de facto» with standards that are now explicit frameworks.
There I understood that certification gives meaning to:
- Orderly knowledge of concepts related to sustainability and environmental, social and good governance standards.
- Development of skills in the use of sustainability and ESG tools.
- Enable better reference and action frameworks for decision making in ongoing projects and future ventures.
These days I read a couple of articles by entrepreneurs and regulators in the U.S. business environment who refuse to establish ESG standards for investment decisions in their portfolios, I found interesting their approach which in summary is «the market already rewards the adoption of sustainable and ESG practices, there is no need to articulate anything new», I think it is a good starting point for discussion.
Some regular questions that come up that I have seen on this topic, why intervene by making ESG standards explicit? should the environmental impact of a specific industry or activity be socialized in the price of the product or through regulation or taxation mechanisms? will this be sufficient intervention to adjust the market towards investments with different impact? should fair practices in the value chain, such as inclusion, non-discrimination, gender equity, be part of the information to be transmitted to the public for their consideration in the choice of products?
My perspective is that we cannot claim that markets or the public have historically rewarded sustainable investments in the right context since the frameworks for comparison are not adequately developed nor have they been transparent – here some points of discussion might be who defines those standards, to determine what investment is sustainable for example? Are these classifications or taxonomies universal or are they defined by someone, and with what authority? and in another way: whether the companies have been sustainable in recent years. and have made it this far, it means that the public has preferred them, so why change?
We must educate ourselves and have a solid construction of values about the role of the company in society and how stakeholders are affected or benefit from complex decisions made in companies, and above all that these externalities must be someone responsible; personally I am not a participant of the crude «laissez faire» especially if it affects third parties and leaves undefined who absorbs the positive or negative, and above all who will pay or receive the bill for these externalities in the long term.
It is expected that companies – and not as an abstract entity, but that their directors, collaborators, agents, etc. – act responsibly with the stakeholders of their investments. act responsibly with the stakeholders of their investments, consider the impacts of their decisions and disclose with transparency the externalities they produce and the practices regarding the environment, the relationship and attention to the legitimate rights of the community where they operate, the practices of compliance with labor laws and employee relations, human rights, health and safety, personal data protection, anti-corruption practices, among others, always complying, of course, with the standards imposed by the regulations in their sector.
This is a dense subject, however I found it interesting for blog reflections,
(*) Certificate of International Sustainable Business ISB Level I, Advisory, at -IASE, International Association for Sustainable Economy-.