What is ESG, and where does it come from?
The term ESG stands for three key pillars of sustainable development: Environmental, Social, and Governance. Here's a visual representation for better understanding:
Each pillar encompasses vital aspects and characteristics for conscious and sustainable economic and societal growth. The discussion around ESG has gained momentum as our fast-paced society increasingly prioritizes social and environmental needs as fundamental to sustainability.
First coined in 2004, ESG emerged from a collaboration between the UN Global Compact and the World Bank. Its primary aim is to foster more conscious and humane corporate practices that minimize negative impacts while maximizing benefits for society and future generations. However, the concept's roots trace back to the year 2000, when the UN Global Compact began introducing discussions on sustainable practice.
Is ESG worth it?
According to a study by the Brazilian Network of the UN Global Compact, Brazil has only recently started to pay closer attention to ESG. In the business sector, 84% of representatives stated that it was only after 2020 that they began exploring ESG criteria and agendas. Additionally, online mentions of the term significantly increased between 2019 and 2020.
For Brazilian companies to remain competitive globally, they must adopt mechanisms that drive transformation and align with the advancements of ESG-focused countries.
Moreover, a PwC study highlights that consumers are willing to pay a premium for sustainable or healthier food products. Similarly, McKinsey research shows that ESG strategies can boost operating profits by up to 60%.
ESG in Food Industry
The food and beverage sector offers numerous opportunities to align operations with ESG trends. Examples include:
Recycling and waste utilization.
Water management and optimization.
Gender equity policies.
Compliance mechanisms.
Traceability, a critical topic in the food industry, provides complete transparency regarding the origin of food across all stages of the supply chain. This transparency aligns perfectly with ESG policies and tools, offering consumers and businesses greater confidence in sustainable practices.
Quality is another essential factor. The food industry's commitment to quality aligns closely with sustainable and responsible practices, yielding benefits such as:
Reduced food waste.
Increased sales.
Enhanced food safety.
These benefits extend far beyond the points above, highlighting the comprehensive relationship between quality control and its positive impacts.
Conclusion
On World Environment Day, it’s crucial to address the rising prominence of ESG resources. Each pillar contributes significantly to the conscious and sustainable growth of economies and societies. Investing in ESG practices aims to minimize negative impacts while maximizing benefits for society and future generations.
In the food industry, adopting ESG practices not only meets societal demands but also drives tangible gains in sustainability, profitability, and social responsibility. Companies embracing ESG approaches can achieve ethical growth while contributing to a more sustainable future.
At Total Ingredientes, we align perfectly with ESG principles!
Our company prioritizes traceability, quality, and food safety through rigorous supplier certifications and internal processes designed to support more sustainable practices. Our facilities and partners are meticulously studied to minimize environmental impacts, keeping future generations in mind.
We firmly believe that building a better and more sustainable future requires staying ahead and consistently applying ESG concepts across our products and workplace!