ESG: a new strategy for 21st century business

By Aguilar y Loera
Aguilar & Loera. Environment, Society and Governance.

The current global context dominated by economic and social inequality, as well as climate change and its imminent consequences, has given rise to a worldwide movement for sustainability.

One of the major efforts in this area is represented by the Sustainable Development Goals (SDGs), also known as the Global Goals.

The SDGs are 17 integrated and interrelated goals to end poverty, protect the planet and ensure peace and prosperity for humanity by 2030.

Faced with this situation, companies are implementing new policies to cooperate in combating social inequalities and the environmental externalities generated by their activities. These policies focus on three factors: Environment, Society and Governance.

The sustainability challenge

ESG strategies or policies are focused on adapting business activities to an environment that requires a strong commitment to society.

The trend indicates that people and their consumption patterns will give increasing importance to the commitment of companies to achieve a sustainable operation.

Currently, ESG strategies worldwide focus on environmental and social factors, ranging from the reduction of carbon emissions to social inclusion within their organizations, with actions aimed at eliminating inequalities based on factors such as gender, sexual orientation and racial origin.

Likewise, evaluation criterion are established to assess the performance of companies in the light of the emerging challenges that the industry faces in these fields. The main objective of this type of evaluations is to guarantee sustainability within the business.

Measuring Progress

In order to measure and analyze the progress made towards achieving their ESG goals, as well as to disclose their efforts, companies issue sustainability reports.

However, the global commitment to the SDGs has led some countries, such as Australia, China, South Africa and the United Kingdom, to make the disclosure of sustainability reports mandatory for some companies.

It is very likely that other countries, including Mexico, will adopt these kind of measures in the near future, and therefore, having an ESG strategy will be crucial for companies’ operations.

This trend is confirmed by the largest companies worldwide. During 2019, 90% of the companies listed in the S&P 500 issued sustainability reports, while the Covid-19 pandemic highlighted the fragility of current production chains in the face of risks caused by environmental causes.

The strategy of the future

At Aguilar & Loera we are convinced that the development of our society has to move towards sustainability and thus we join the efforts to develop new strategies for our clients, always aiming to provide them with the appropriate solutions to face the challenges originated by climate change and the continuous evolution of the global context.

Therefore, we constantly monitor the latest developments in order to provide our clients with a comprehensive, up-to-date and dedicated advice to meet these new challenges, which is why we are at your disposal to cooperate with the development of your ESG strategies.

For further information, please contact us and we will be pleased to assist you.