ESG by design

  •   5 min reads
ESG by design

ESG by design, the concept bears parallels with privacy by design but is perhaps even more important. Marcus Maida explains:

4:48 on February 14, 1990, just 34 minutes before they shut down, Voyager 1 was turned to the location of its origin, and a picture was taken. At approximately 6.4 billion kilometres, we see Earth. It is touched by a ray of sunlight, and it became known as a pale blue dot —less than one pixel in the original image. Conceived by Carl Sagan, the photo shows our home, the Earth, as it really is: small, fragile and finite.

In his words:

“There is perhaps no better demonstration of foolish and vain human pride than this distant image of our small world. For me, it accentuates our responsibility to behave more kindly towards one another and to protect and cherish the pale blue dot, the only home we know.”…

And from the sight of this famous photo and the reflection of the text above, I bring you the concept of “ESG by design”.

We started with the ESG: Environmental, Social and Governance, a set of practices that, if well applied, can increase the competitiveness of companies.

However, the term is not new; it was coined in 2004 in the report Who Cares Wins from the UN.

“Let us remember that in an increasingly globalized world where competition is increasingly fierce, its bias is 100 per cent economic.”

Thus, the adoption of these practices can indicate the solidity of a company, its search for better costs (not necessarily the lowest), a better reputation and, finally, a greater resilience to market uncertainties.

The “by design” that completes the concept derives from privacy and data protection by Ann Cavoukian, former Commissioner of Information and Privacy of Toronto and visiting professor at Ryerson University, Canada.

On top of these two basic concepts, I make my adaptations to define this term: “ESG by design.”

Its meaning indicates that issues related to the environment, social and governance are incorporated from “the beginnings”.

I learned many years ago that “the principle is the most important”. Today, I can say that the important thing is “the principles”.

I can alternatively describe “the principles” in two ways: the first as values of life, those that make us wake up every day and face the ills of everyday life without being corrupted; and the second, as a beginning, the kick-off of something (after all, as the popular saying goes, “what starts badly cannot end well”).

Understanding the applicability of “ESG by design” forces us to break paradigms. Accept that the ESG (even more  post-COP26) is not a polarized agenda. It’s not left or right. It is an agenda for all of us, inhabitants of this fragile and pale blue dot.

I must remember that if we had done something after Eco-92, the United Nations Conference on Environment and Development, which took place here in our backyard, in Rio de Janeiro, we would not be almost 40 years behind schedule and, for many scientists, we would not we would have passed the environmental tipping point.

We cannot be deceived. Agenda ESG emerges as a market need. After all, think with me, who am I going to sell to if I don’t have anyone to buy?

Amazing, my dear, few really care about sustainability issues.

All that matters is profits. And this is where we come in! Where we can really make a difference!

We decide from whom we buy!

That’s why it’s important to understand ESG, especially to avoid falling into the traps of greenwashing, a green makeup strategy that “dresses” the company with eco-friendly and gives a false appearance of sustainability, leading the consumer astray.

ESG the elevator pitch
What is ESG?Why is ESG important?Can a company that adopts ESG also maximise profits?What are the challenges in adopting ESG?Why demand for ESG is growing.The ESG opportunityESG and the labour shortage

Make no mistake, ESG involves consistent practices

  • The “E” in Environmental, which translates to environment, is not limited to the natural environment, trees, rivers, the sea, etcetera., but also to the artificial, cultural, and working environment (some still classify the genetic heritage as the environment).
  • The “S” indicates the social, must be seen from a micro to the macro cosmos. See the company’s employees, service providers, families, friends, and the population around them, and make this vision reach their communities.
  • Finally, the “G” of governance is how this company is managed if it complies with its market rules, the rules of the government, if it pays its taxes, and if it goes beyond the social object and fulfils its social function.

The “ESG by design” is my proposal for companies, new businesses and, especially startups, to incorporate this concern into their business model.

For this, I put five characteristics that these new businesses should consider in their action plans:

  1. Be proactive and not reactive on ESG issues;
  2. Apply transparency;
  3. Follow the principles of diversity and equity;
  4. Act locally (strengthening community ties and the surrounding economy);
  5. Be ethical.

I invite you to join me in demanding an ESG and for future companies to apply “ESG by design”, observing the five characteristics that I list: proactivity, transparency, aligning with the principles of diversity and equity, act locally and be ethical.

ESG and company culture and ESG by design
ESG needs to be embedded into a company’s culture. Maybe one way is ESG by design.

Recalling the words of the Persian poet Saadi of Shiraz:

“The sons of Adam form a single body; they are made of the same essence.
When time afflicts one part of the body with pain, the other parts suffer.
He who is indifferent to the suffering of others is not worthy of being called human.”
And finally, I provoke:
What do we want?
A better world for our children or better children for the world? (could we have both?)

Source: Marcus Maida

Marcus Maida is a lawyer and business consultant with over 15 years experience. He focuses on the areas of business modelling, strategic management, ESG, GRC and Data Protection (acting as DPO). He has an extension in entrepreneurship at Babson College (USA), a consultant in open innovation and received as a guest researcher at Purdue University (USA).

He is also an angel investor, author, TEDx speaker with the theme: “ESG by design”. In addition, he is a mentor and evaluator of startups in several programs, public and private and a consultant for the production of “SharkTank Brasil” 2nd. at 6th season, consultant for the direction/content of the program “O Plano é esse” (Multishow, 2021) and “Ideias à Venda” (Netflix, 2022), Director at the Department of Micro, Small and Medium Industry and Accelerate, at FIESP and a Member of the Special Commission for the Protection of Personal Data of OAB SP (2021).

Image credit.

Article originally appeared at ESG Global

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