ESG: How the Management Model Helps Small Businesses

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The darling of the market right now is called ESG and it is reaching the vast universe of small and medium-sized businesses. In 2021, the topic was on the agenda of several events of large companies such as XP Investimentos and Exame because it involves business viability and the trend is for it to be even greater. Therefore, you must open the eyes of the subject.

You need to survive, pay the bills, expand, make new machinery purchases, hire employees, launch new types of services, change your packaging provider, face market fluctuations, and still have positive results, right? Therefore, it is urgent to understand how to apply ESG in context.

What is ESG?

In the second class of the case study “Future Present”, which tells the story of Reginaldo Morikawa and Korin, the specialist says from the beginning that ESG (environmental, social and governance guidelines) is a model that helps in the management of sustainability practices and creating value for the company, for the client and for society. Do you know what this means in practice? Risk reduction, competitive advantages and economic profitability.

Today, people have quick and easy access to quality information, there are numerous channels of contact between companies and their consumers, several similar options on the market and comparisons are increasing. But research shows that companies with ESG practices tend to be the most preferred.

Apply ESG

So if your goal is to protect the value of your business in the long term, this is a good way to go, especially since following these guidelines is an alternative for new forms of income, products and access to new niches. Do you want an example? Reginaldo himself, as CEO of Korin, helped the company grow almost 800% during his tenure, as he always looked for ways to generate sales, have margin and promote innovation from the constant observation of risks. There are some essential questions to ask:

  • Who are the rural producers?
  • Are the inputs used of quality?
  • Do third parties have fiscal and fiscal risks? How could this affect Korin?

This type of initiative allowed the organization to develop more and more plans to reduce the problems that could arise and adapt to the new needs of consumers. If Korin was successful, even in the face of various challenges that nearly caused her to close her doors, her business may be more assertive with ESG as well.

Assess where your process is

However, first of all, it is necessary to take into account what your stage is in relation to ESG. By the way, did you know that there are 4 stages for small and medium businesses when it comes to ESG?

If your company does not yet have practices in this line, it will probably be in the “nonexistent” stage. If it has already started, but in a very subtle way, it can be considered fragile. If it evolved a bit, but still has important things to organize, it may be set as moderate. Finally, if the practices are duly consistent, measured and their results are perceived by the interest groups as a whole, it tends to a mature stage.

You can refer to this panel to assess the maturity of your company in class 2 of the case study “Present future”, available here. Before that, let us know, quickly, what kinds of initiatives that already exist in your business do you think are geared towards ESG?

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