Sustainability has become one of today’s most discussed topics in business. To give you an idea, searches for the term ESG in Brazil nearly tripled in 2021, with a 150% increase according to a Google survey.

But did you know that, far beyond compliance, using ESG strategically can help your company make better commercial decisions?

In today’s article, we’ll dive deeper into this much-debated concept and share ideas on how you can define and implement a Sustainability Management System that includes environmental, social, and economic sustainability—well beyond a purely formal approach. Check it out!

What is ESG?

First, it’s important to define ESG. Many people associate ESG almost exclusively with environmental sustainability—like recycling and paper reuse initiatives. While ESG does include the environment, the idea is to cover together environmental and social sustainability and governance.

By representing these three fronts, ESG can be used as a thermometer for how a company seeks to minimize or counterbalance the impacts of its activities on the surrounding community, on the environment where it operates, and on society where it does business.

For this reason, ESG is also considered a sign of good market practices, attracting more and more potential business partners—especially internationally.

The term was created in 2004 by the United Nations (UN), as part of an initiative aimed at companies to foster more sustainable global markets and better benefits for society.

How ESG works in practice

Precisely because it guides companies to evaluate their activities and define strategies accordingly, ESG is not a checklist of practices to implement, but rather a set of initiatives that help decision-making guided by sustainability.

The idea is to reconcile profits, goals, and growth plans with environmental, social, and governance responsibility. By using ESG as a compass, companies can evaluate the impact their activities have on society and the environment, and propose initiatives that neutralize negative consequences.

An interesting example that illustrates ESG in practice is the carbon credit. Carbon credits are essentially a certificate used to represent the non-emission of one ton of carbon into the atmosphere. So if a company cannot reduce emissions from industrial activities, it can purchase the credits needed to neutralize that impact.

The idea is always to leave a positive balance for the environment, society, and the place where the company operates. Through careful analysis of company activities and the entire production cycle, it’s possible to identify gaps that negatively impact operational sustainability. From this information, the responsible team can define initiatives that mitigate negative impacts and bring ESG into practice.

What is a Sustainability Management System and how to implement it

With detailed information about purchasing, production, sales, and distribution processes, sustainability professionals can begin analyzing the main impact points in the business operation. It’s worth noting that needs vary depending on the type of activity and location.

For example, industrial operations may have a greater effect on greenhouse gas emissions—directly impacting air quality and the surrounding nature. On the other hand, organizations with expansive nationwide logistics may have concerns more related to community development in the areas where they operate.

Another important part of the analysis is assessing supplier and business partner practices to ensure everyone is doing their part.

In any case, the first step is to classify impacts within the three ESG spheres: environmental, social, and governance. Below, we’ll explore each area and propose examples of initiatives your company can implement to mitigate impacts.

First, E stands for environmental. This covers concerns related to nature and the environment, as well as local flora and fauna. Topics such as global warming, pollutant emissions, air and water pollution, biodiversity impact, deforestation, and waste management all fall under this aspect.

Examples of initiatives to counterbalance environmental impact are usually the most common and easiest to implement, such as water and electricity saving programs, paper recycling, carpooling, among others. Depending on company size, it’s important to go further and seek partnerships or support that address causes like animal protection and deforestation.

Next, S represents the social aspect. Basically, it includes all people impacted by the company’s activities. Customer satisfaction, employee care, inclusion policies, initiatives with the local community, and compliance with labor laws are important components here.

Beyond the image your company wants to project, the fact is consumers are increasingly looking for companies that care about human and social issues. Implementing processes focused on people’s well-being—like training and a healthy workplace—will reflect directly in company results.

Finally, G stands for governance—aspects related to company management. The concern is to maintain transparent and honest administration, including executive values and conduct, audits, and compliance with relevant laws.

Governance is often the most complex aspect because it must align with company objectives and goals. When ESG becomes a business value, sustainability becomes part of commercial and strategic decisions. This helps the business develop healthily and contributes to a fairer country with benefits for everyone.

And it all starts with the first step. Click here to get in touch and learn how Ideal Work can help your company dispose of uniforms responsibly.