ESG is no longer just a trend but a reality in the corporate world.
According to Bloomberg (one of the largest data technology companies on the planet), global investment in ESG will amount to US$53 trillion in 2025, compared to US$38 trillion in 2020.
The advancement of investment interests in ESG is due to the global impacts of the pandemic. The pandemic has alerted the entire population to the health and environmental crises. As a result, investors are also becoming more aware of sustainable issues.
Shall we talk a little more about it? Read on!
According to an article published in October 2020 by Ferriani and Natolo (2020), investors are paying attention to the ESG risks of investment funds, highlighting environmental risks as an alarming concern. See the image below:
As we can see, especially at the beginning of the pandemic, funds that had a high ESG risk received fewer investment assets compared to funds that had a low ESG risk, i.e. those that returned a high ESG performance.
Basically, this data reflects that companies that aren't paying attention to sustainable practices won't make a profit in the long term.
Have you thought about how this influences the whole market? Investors today prefer companies that are attentive to environmental issues, and that are establishing an ESG model within their organization.
How Brazil fits into this scenario
In this sense, Brazil has enormous potential and is full of opportunities. The world is turning its eyes to the preservation of the Brazilian biome, which is internationally recognized.
As we have seen, investors are looking for companies that are concerned about being sustainable, because they know that these are the companies that will generate returns in the long term.
What's more, the ESG market is still in its infancy in our country. According to Anbima (Brazilian Association of Financial and Capital Market Entities), in June 2020 R$ 543.4 million were allocated to sustainable equity funds, which is very little compared to Europe, where this agenda has been debated for at least two decades.
Just so you understand a little more, in July 2020, the European Central Bank (ECB) announced that it would invest 2.8 trillion euros (R$16.8 trillion) in green investments. And all this investment comes from just one bank in Europe. The Europeans are waiting for us to start investing in Brazil.
It's time to act
The big question in understanding all this is: how can your company align itself with ESG issues and attract potential investors from all over the world?
The first step is to carry out a basic analysis to find out where your company stands in terms of ESG parameters. By answering a few simple questions, you'll understand the next steps to take. Let's take a look at some of them:
- What activities does my company carry out that have a negative impact on the environment?
- What technologies can help me make my company more sustainable?
- What kind of project can I start to make my company more sustainable?
- How inclusive is my company's workforce today?
- How is my company helping to improve the quality of life, not only of my employees, but also of the community around it?
- Does my company respect its employees and provide them with quality of life?
- How transparent is my company's top management?
- How are sustainable and social guidelines being encouraged in all areas of the company?
- What level of investor relations does my company have?
It's worth remembering that these questions will guide you on your ESG journey, but it's necessary to implement practices and metrics so that your company can truly establish itself as an ESG benchmark in the market.
Abundance was born with the aim of making your business a benchmark in ESG. To do this, we will identify your company's ESG level, draw up a practical strategy to realize metrics that truly incorporate ESG, and closely monitor the steps your company will take towards a higher ESG level.
This way, investors who are aligned with your purpose and objectives will connect to form a true ecosystem of abundance in your region! Are you curious? Then come and see ESG Flow, an exclusive digital transformation method for companies.