Recently, the shares of the Tesla company suffered a sharp drop after being banished from the ASG index, prepared by a selective stock market group that groups the 500 most listed companies that meet environmental, social and governance criteria.
It What happened to Tesla is an example of the systemic changes in the way of understanding business in all sectors and how environmental, social and governance (ESG) strategies and sustainability are becoming increasingly relevant for organizations in the face of their consumers, investors and strategic publics.
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ESG strategies have managed to be something that goes far beyond just being a responsibility or an announcement, they have become an opportunity to build more sustainable businesses, to raise the relevance and credibility of organizations.
Data from the EY Law firm, 50% of consumers consider that sustainability is relevant when making a purchase decision and 42% of them think that they would consider refusing to buy products or services from a company that is proven to have done something environmentally or socially wrong.
Any professional who has been linked to Corporate Social Responsibility (CSR) and Sustainability in recent years will have seen how, in a very short time, everything has accelerated. Social pressure, that of investors and, above all, a regulatory avalanche that is coming for Environmental, Social and Governance (ESG) aspects, will force us to review and reinvent all aspects of this matter.
For Hernán Pacheco, leading partner of EY Law, the legal industry is strengthened to support companies in dealing with these changes. According to data provided by the expert, 66% of stakeholders They believe that company CEOs should take initiatives to implement ESG policies before governments adopt mandatory regulations, as is already happening in some countries.
For example, in the United States, the Biden administration issued a rule requiring companies registered with the United States Securities and Exchange Commission (SEC) to include certain climate-related disclosures in their filings. .
PoOn the other hand, in 2021 alone, 165 regulatory initiatives were approved in the European Union related to the three dimensions of sustainability.
Carmen Rovira, Lead Partner of Financial Accounting Consulting at EY, reported that rules and regulations could come into force in the coming months that will transform the reporting of non-financial information in Europe, instruments whose main objective is to reduce the existing gap with financial information .
These requirements will initially have their greatest impact on European companies, however, the EU has considered that a standard with these characteristics will benefit employees throughout the value chain, and also companies “as regards harmonisation, legal certainty, a level playing field and the mitigation of unfair competitive advantages of third countries resulting from lower levels of protection, as well as social and environmental dumping in international trade”
The demand around companies’ sustainability policies is increasing. Those companies, in Costa Rica and the region, that still do not consider it necessary to integrate sustainability factors into their strategies are in danger of losing their value in the long term. It is not a change that is coming, it is a change that is already here.
