In recent weeks, with the Climate Conference that took place in Egypt (COP-27), much has been said about the ESG acronym. This term, which takes into account environmental, social and governance aspects, is also on the rise among Brazilians. A study shows that 38% of Brazilians surveyed have already heard of the term. Among younger people, the percentage is even higher.

And you? Have you heard of ESG? Come understand why this term can boost your business and why your company needs to keep an eye on this agenda.

What is ESG? 

ESG is an acronym for Environmental, Social and Governance and translates into good practices that companies follow around sustainability, social responsibility and corporate governance.

E – Environmental – Environment

It relates to sustainable practices such as reducing the carbon footprint and less aggressive practices to the environment. Data is reported on climate change, greenhouse gas emissions, biodiversity loss, deforestation, pollution, energy efficiency and water management.

S – Social

The social part shows the company’s concerns regarding the community, diversity and inclusion of people. Data is reported on stakeholder safety and health, working conditions, diversity, equity and inclusion, conflicts and humanitarian crises, and are relevant in risk and return assessments directly through results that increase (or destroy) customer satisfaction and employee engagement.

Governance – Governance

Corporate governance deals with good practices of the company’s own structure, such as councils, committees, audits and complaint channels. Data is reported on corporate governance, such as prevention of bribery, corruption, Board of Directors diversity, executive compensation, cybersecurity and privacy practices and management structure.

The acronym first appeared in 2005, at a UN conference where financial institutions gathered to propose ways to involve the topic within this market. Since then, companies from the most diverse segments have been applying and proposing ESG practices. With the pandemic, the agenda became even more popular as it awakened a sense of urgency and duty towards the environment and consumers.

The feeling of these consumers is reflected in the study results itself. Of those interviewed, 75% say that companies with sustainable practices have more chances of loyalty, and more than half of the respondents would be willing to pay more for a product that is less aggressive to nature.

Not only consumers, but the market itself and investors are also keeping an eye on companies with good ESG indicators. According to another survey, 90% of investors surveyed responded that ESG can be one of the decisive factors when allocating financial resources, and three quarters still say they would be inclined to divest from a company if it had low ESG indicators.

These factors show that every year Brazilian companies are more interested in ESG, and for good reason. The topic is seen as important for the consumer side, who prefers and promotes brands with good indicators, and is also seen as important for the investor who considers that sustainable practices boost company profitability. The Brazilian stock exchange (B3), for example, has a corporate sustainability index, which is composed of assets from companies recognitionally committed to sustainable practices. And since its creation, the assets of this index have represented a higher return against the average of the stock market in general. 

Applying ESG Practices in Technological Infrastructure

There are several ESG practices that can be applied in your company, but many of them go unnoticed by most managers. It is important that all areas of your business team are evaluating how to implement ESG practices in their department. And this can be, in many cases, a greater challenge for those who manage the infrastructure area.

It is in this scenario that cloud provider offerings can be valuable and differentiated for those seeking to implement ESG practices, reducing operational costs and the carbon footprint of their infrastructure.

Studies indicate that an AWS cloud infrastructure, for example, is on average 3.6 times more energy efficient than a traditional data center. In addition, AWS aims for the entire organization’s infrastructure to use 100% renewable energy by 2025.

Furthermore, with AWS, reports on your carbon footprint are created automatically, facilitating the generation of data for your company’s ESG indicators.

By using a cloud infrastructure, your company has access to the most modern processors on the market, which reduce the carbon footprint and provide better cost in relation to performance. AWS recently launched the new generation of virtual machines that use Graviton3 processors that use up to 60% less energy than other comparable machines.

A final challenge is how to collect ESG data and generate metrics and indicators that can be presented to the public and the market. By migrating your infrastructure to the cloud, you are able to build a data solution that allows extracting and consolidating ESG indicators and drawing an action plan for your company, making it attractive to both users and investors.

Need Help Creating a More Sustainable Infrastructure?

Zappts can help your company migrate to the cloud and maintain your company’s infrastructure. Since 2014, Zappts has been delivering business results through technology, delivering high-relevance cases using agile processes, best practices in software development and quality, and a unique ability to understand and solve the day-to-day pains of technology development projects.

We provide solutions for all phases of digital solution development, from discovery processes to solution support. With defined processes and agile management, our deliveries are always based on expectation alignment, quality, and technical robustness.

Get in touch by clicking here, and learn more about Zappts.