What's Up with ESG?

It's been five years since my startup (pymohub.com) launched. I remember how back then, nobody could foresee that social and environmental impact would become integral to business strategies.

In fact, most people didn't take what we were building too seriously.

After years of realizing just how significant ESG would become for companies, it turns out that today, it's right at the top of everyone's agenda. 🎯

Some interesting facts:

👉 The first veto in President Biden's tenure revolved around ESG because some actors are trying to prohibit investments through this lens.

👉 Deutsche Bank and Goldman Sachs faced investigations by the SEC for greenwashing.

👉 From most business forums and executive compensation packages to discussions in corporate boardrooms...

Social and Environmental Impact is now firmly embedded in private sector conversations.

Now, the big question: What changed?

Has the ultimate goal of companies shifted from solely making profits to creating an impact?

For me, the answer can be summed up in one word: Incentives

What I see is that companies didn't suddenly become 'stakeholder-centric' (focused on their related parties); they always have been.

Consumers, investors, local communities, and company employees have always wielded influence. The only thing that has changed, in my opinion, is the incentives.

Investors (and this is a fact) are now demanding from those managing their funds that they want to invest in genuinely sustainable companies for a myriad of reasons. The main one? Risk mitigation.

• Reputational risks, the risk of losing conscious consumers, or access to capital.

• Climate risks.

• Social risks.

ESG simply means that investors are looking at companies through a lens that does, indeed, consider financial performance and Excel projections, but also acknowledges that those projections can be adversely affected if the company doesn't begin reducing its negative impact on the planet and society.

That's it.

Incentives.

If you're interested in delving deeper into the market forces propelling ESG.

If you're curious about the downsides of this new trend.

If you're eager to get involved but don't know where to start...

Let me know via email at soyfefsilva@gmail.com

Thanks for reading.

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