The Brazilian consumer is increasingly aware of conscious consumption issues, opting for ESG and impact purchases. In this context, delivering information on positive environmental, social and corporate governance issues when making a purchase decision is fundamental to your brand’s positioning strategy. Understand in this content what ESG and impact purchases are, as a new concept of conscious capitalism.
What is ESG?
The term ESG (ASG, in Portuguese) is widely used to represent business practices (positive and negative) in environmental (E), social (S) and corporate governance (G) aspects. In Brazil, this movement has been gaining more and more importance, although it is not new, especially due to the pandemic and social crisis.
To be clearer, according to CFA Institute, the acronym has the following meaning:
- Environmental (E): These are measures to conserve the environment, including efforts related to climate change, greenhouse gas (GHG) emissions, pollution, biodiversity, waste and tributary management, etc;
- Social (S): These are measures related to people and their relationship with the company, such as: customer satisfaction, employee engagement, diversity, relationship with the communities where the company is located, data protection, labor relations, etc;
- Governance (G): These are the measures of a company’s management standards that deal with the composition of the board of directors, structures of audit and fiscal committees, anti-corruption processes, ombudsman, transparency of information, etc.
The term was coined in 2004 in a publication by the Global Compact in partnership with the World Bank, called Who Cares Wins. It arose from a provocation by UN Secretary General Kofi Annan to 50 CEOs of large financial institutions, about how to integrate social, environmental and governance factors in the capital market.
However, before that, in 1994, John Elkington (considered by many to be the “father of ESG”) released the article “Towards the Sustainable Corporation: Win-Win-Win Business Strategies for Sustainable Development” drew attention to the need to measure environmental and social impacts through time “Triple Bottom Line”. But it wasn’t until 2020 (and now again in 2021), with a letter from the president (Larry Fink) of the largest asset manager in the world (BlackRock), reinforcing the need for ESG commitments, that the term gave a “boom” .
What are ESG and impact purchases?
ESG and impact purchases are those that consider positive environmental, social and corporate governance factors when making a purchase decision. It is a new concept of “conscious capitalism”, where everyone does their part. Companies seek to positively impact their value chain, acting in all ESG aspects, while it is up to consumers to make better choices, choosing to consume products and services from these brands.
Examples of ESG and impact purchases are those whose inputs are of local origin and which comply with environmental and labor legislation and which positively impact the community where the suppliers are located. These are products that do not test on animals, that use recycled materials, within a circular economy. Whose corporate governance values the diversity of its employees and leaders, developing activities for social inclusion and fighting corruption.
Finally, it is important to highlight that sustainability already weighs in the Brazilian purchase decision. It’s time for conscious consumption, that is, ESG and impact purchases.
How can you help the consumer when making a purchase decision?
It is very important that your brand provides the information, at the time of decision, for your consumer to make ESG and impact purchases. With eumostro your brand can show all the positive impact it makes behind the label.
With eumostro’s ESG transparency seals you can communicate your positioning in a simple and intuitive way, adding the seal to your packaging, webpage, online stores (e-commerce) and much more.