Tag: ESG

Digital ethics and the goals of the UN

In recent years, issues related to ethics in the corporate world have been increasingly debated with the aim of directing conduct and improving coexistence in the market.

The Brazilian Institute of Ethics in Competition - ETCO, has been defending this cause for twenty years, proposing initiatives and amplifying debates, demonstrating that respect for ethics and the law are factors that encourage development, providing legal security, a fundamental factor for attracting investments and generation of jobs and income.

This pioneering vision, in the last decade, was strengthened by the action of the UN in defining the so-called Social Development Goals, the SDGs, which should guide actions to achieve results by the year 2030. This agenda stimulated the adoption of ESG metrics in the corporate world, guiding the achievement of goals aimed at the effective respect for the environment, social relations and best governance practices.

These positions are directly related to combating misconduct and defending compliance with the law, strengthening actions: sustainability, reverse logistics, pollution reduction, generation of carbon credits, labor rights, acceptance of diversity and inclusion, encouragement of participation, fight against corruption; compliance with tax and social obligations, defense of legal practices in the market, traceability, among others.

However, alongside ESG practices — favorable to the dissemination of values ​​and principles in the corporate environment — attention is drawn to the so-called “greenwashing”, which can also be accompanied by “socialwashing” and “compliancewashing”, that is, this may not be true. concern with sustainability, respect for society and the fight against ethical deviations, these postulates can be mere declarations, constituting misleading advertising. Thus, it is necessary that the policies adopted are effective, efficient and efficient.

This context demonstrates that capitalism, founded on free enterprise, has to assume responsibilities, incorporating the defense of human rights in corporate governance. Profit at any cost is not acceptable and has been increasingly rejected by society.

Social networks and the media have been revealing behaviors that are repelled: companies caught for practices considered racist; acceptance of harassment; use of work analogous to slavery, even if carried out by contracted third parties, in short, any disrespect to human dignity is denounced and those involved must take a stand, given that reputational losses are quickly felt.

Respect for the principles and values ​​highlighted by the ESG are certainly valid for social media – a new dimension of human relationships – which are becoming increasingly important and which, equally, must respect ethics and the law. After all, the internet cannot be isolated from reality, therefore, it needs to follow the rules of coexistence. The dissemination of lies, the so-called “Fake News” that intentionally expand ignorance; the stimulation of hatred; the offer of illegal products that harm health; of miraculous medicines and healing processes, among other practices identified in the digital space; must be curbed and are being the subject of legislative initiatives, not only in Brazil, but throughout the world. These laws need to be deeply discussed, to validate transparency and remove any relationship with censorship, aiming to contain abuses.

It is interesting to note that whenever there is a movement of control in the digital environment, there are reactions stating that the sacred right to freedom of expression is being violated. This happened when it was proposed to curb offers of illegal products by marketplaces and, as the discussions matured, it became evident that offers cannot be confused with freedom of expression. There has been progress in shaping this understanding, including the participation of operators in the digital market. The same must happen when they intend to mix up the fight against false information with censorship.

The digital environment will only grow and will have to adapt to the law and respect for ethics, as all human activity should be, whether on a personal level, or in the institutional and corporate environment. And the same should happen with the development of Artificial Intelligence. This movement is irresistible.

Even with the enactment of laws, as a proposal for conflict resolution, it would be interesting if judicialization were avoided with the adoption of alternative means, such as mediation, seeking greater speed and legal certainty. Self-regulation can be encouraged with the participation of the parties involved in the search for convergences and consensus, after all it is not credible that large companies, global players in the digital market, bet on confrontation and are contrary to ethics and the law.

There will certainly be advances and the ESG metrics disseminated by large corporate structures will not be mere declarations of good intentions, both in the physical and digital markets.

ESG: capitalism beyond profit

We have seen, with increasing prominence, in the stock market and in the Brazilian corporate environment the acronym ESG, which represents indicators that guide investors in assessing the conduct of companies in areas considered strategic: environmental, social and governance (environmental, social and governance).

Thus, the initiatives that companies should encourage to demonstrate that their actions are guided by respect for the environment are pointed out; the adoption of social policies that involve the internal positions of inclusion and coexistence of employees; for the relationship with the community; and also through corporate decision-making processes, encouraging the adoption of values ​​related to control, dignity, ethics, transparency and legality. With a focus on these actions, companies can attract funds allocated to global investment funds, which turn over trillions of dollars.

This movement was encouraged in 2015 by the UN World Development Agenda (Global Agenda 2030) - a commitment signed by 193 countries, including Brazil - determining the joining of forces in favor of a World Sustainable Development Agenda, which must be fulfilled by the year 2030, contemplated in 17 Sustainable Development Goals, which were divided into 169 goals.

The objectives range from poverty eradication, health and well-being, education, actions against climate change, clean energy, decent work and economic growth, to reducing inequalities, peace, justice and effective institutions. A list of actions of this magnitude, divided into 169 goals, could be considered as another utopia within the scope of the United Nations, which would remain on the plane of duty, without an effective application.

However, these objectives attracted the attention of global investors who understood that companies could not be left out of this process, the demands, the expectations of society have changed, demanding more strongly that this agenda be for real and that it involves governments, NGOs and the sectors productive.

Today it is normal for a company, which does not need to be large, to demand investments, to be asked whether it meets the goals of the UN Agenda 2030. The so-called responsible investment funds already handle 31 trillion dollars, which represents 36% of the total financial assets managed in the world.

ESG indicators involve topics of great importance, however, I note, in the journalistic articles that have been explaining these indicators, that the “E” (environmental) has been highlighted in greater detail, to the point of “S” and “G” being in second plan. In fact, diversity and inclusion actions have assumed relevance, as have integrity programs, but the attention that is presented in the reports has been more focused on the environmental issue.

Initiatives to increase the participation of women in Boards of Directors; inclusion of professionals from different backgrounds, cultures, genders and races; combating harassment; encouraging actions to respect the consumer, with the adoption of ombudsmen; the development of integrity programs and the fight against any illegal practice represent the evolution of concepts and principles of the corporate environment. Thus, the points related to Social and Governance should also be highlighted, composing a balance between the desired indicators, since they represent a whole that should not be dissociated.

This evolutionary sense is very interesting. The investor's objective is the profitability achieved by the profit, however, this goal, increasingly, cannot be achieved at any cost. Society and consumers demand new postures from companies, which must meet ESG commitments that go beyond basic profitability postures: low cost, high productivity, attractive price, logistics, sales channels, marketing policy, tax adequacy.

UN Secretary General Antonio Guterres said that the “Global Agenda 2030 is our Global Declaration of Interdependence”. I dare to affirm that, with this advance stimulated by investment funds, this Agenda represented a meeting that recently could be considered unusual: capitalism with human rights, enabling the generations of Human Rights to be inserted in the strategic vision of companies. Certainly a necessary stimulus for renewal and innovation, with inclusion, compliance and sustainability.