ESGAn index that evaluates companies regarding the impacts of their practices in social, environmental, and governance terms.
ESG (Environmental, Social, and Governance) parameters have gained global traction with financial consultants, banks, and investment funds to assess the impacts and performance of companies in the environmental, social, and governance areas. The environmental criteria assess whether companies respect legislation and natural resources. The social criteria examine possible violations of human and labor rights in production chains. Governance, on the other hand, evaluates anti-corruption and compliance practices. Thus, companies with better scores in these items tend to attract more investment. The measure should also bring more transparency to investors, whether public or private. In Brazil, its application still needs to grow substantially. Currently, most companies that adhere to the parameters do so due to demands related to foreign trade.