Learn more about ESG
Learn more about ESG, this new metric that is driving business decisions
Since the beginning of the 2000s, companies have increasingly understood the environmental, social and governmental impact of their work as fundamental to their survival.
Below we will present what each letter of this metric means and examples of possible actions in each of these areas.
What is the ESG metric and what is it for?
Launched in 2004 by an initiative linked to the UN, the term “ESG” (acronym for environmental, social and corporate governance) gained traction and started to receive greater attention and investments during the pandemic, amidst discussions about whether environmental crises predicted by science, especially climate, could also have global impacts in the future.
Studies and reports from analysis houses indicate that companies in line with these principles are doing better not only in terms of image management, but also financially.
If before, the focus was only on short-term financial results, pure and simple, business leaders around the world began to realize that good environmental, social and governance practices are also noticed to be noticed by their consumers and investors, and that’s it that emerged the ESG metric, which stands for Environmental, Social and Governance.
E – Environmental
The first letter refers to the environmental issues that affect your business, such as air and water pollution, greenhouse gas emissions, logging, and your company’s carbon footprint.
In addition to the ecological importance of decisions that are equally beneficial to the environment and the survival of humanity, a good ESG analysis can avoid the financial losses that environmental accidents often cause.
The fallout of a serious accident caused by a large mining company can affect not only the fauna and flora of the region, but also local families and investors through social and financial losses such as fines and indemnities.
If a company does not understand that there is a sustainable way to promote consumption, how can it persuade customers to consume its products?
S – Social
This letter refers to the social impact of your business such as:
- Client satisfaction;
- Labor relations with employees;
- Team diversity;
- Employee engagement.
If a fashion company employs labor conditions analogous to slavery, for example, the humanitarian cost it causes to workers in that region is enormous. It additionally risks a financial cost, since the company’s image may be damaged to the point of turning away potential customers.
If a company does not understand that its team of employees and decision makers must reflect the diversity that exists in society today, it will hardly understand the tastes of its customers and will probably not perform well in its sector.
G – Governance
This letter refers to the governance issues of your business, such as transparency, your relationship with government entities, corporate conduct, and the composition of your company board.
If a CEO marks personal expenses as company expenses, the minority partners end up paying this bill as well. If minority partners do not have transparent and real-time access to the company’s revenues and expenses, the business’s performance becomes less accessible and, ultimately, less interesting to new investors.
Moss can help your company improve its ESG metric
One of the main goals behind the ESG metric is the improvement of a business’s impact on the environment, such as its emission of greenhouse gases contributing to global warming. Moss has a fundamental role in solving this problem.
Through Moss, companies and individuals can offset their carbon emissions. This is due to the MCO2 Token, the carbon credit sold by Moss, and is linked to environmental projects that can offset tons of carbon dioxide (CO²) through the conservation of trees and fragile biomes.
You can learn about some of these projects by clicking here.
Contact us. With Moss, it is possible to make your daily choices more sustainable in a simple way.