The acronym ESG stands for environmental, social and governance. At first glance, the idea of innovation might seem to be out of scope for some people, but that impression is only superficial. By adopting ESG practices in their operations, companies are forced to review their processes and end up innovating more. The result is that the companies that innovate the most are also at the forefront of environmental, social and governance responsibility. In recent years, companies have noticed that without real changes to ESG values, they would fall behind. One of the most outstanding characteristics of the consumer today is the demand for true actions from companies for a fairer world.
A survey conducted by Union + Webster shows that 87% of the Brazilian population prefers to buy products and services from sustainable companies. This scenario calls for action. Companies are being forced to change their practices in order to create internal and external solutions in favor of the environment and society. The way for this to happen is research and technology. In other words, innovation.
ESG business model
It is necessary, however, to make ESG values part of the company’s strategy, and not just a marketing action. When the company is evaluated by the market and consumers, these practices will be considered as an asset of the institution, effectively improving the company’s evaluation. Therefore, it is not enough to adopt the ESG discourse: it is necessary to demonstrate its practice.
According to professor at Fundação Dom Cabral, Heiko Spitzeck, in the e-book “Innovation: the ESG engine”, most innovations that involve new business models, more sustainable products and services are born from the company’s purpose and a understanding of the organization within the ecosystem in which it operates, in order to create value for various stakeholders.
The connection between ESG and innovation is essential, the study “Recognise Your Impact: Practical Paths to Achieving Transformational Sustainability”, by the IBM Institute for Business Value, shows that 51% of Brazilian CEOs believe that sustainability will accelerate business growth, which reaffirms that implementing sustainability policies in companies is moving up the chain of priorities and gaining even more strength.
How important are ESG and innovation to your company?