This article first appeared on La Tercera on October 28, 2020.

Crisis represents an opportunity and today, when we are going through one of the greatest crises in history, is when we must make the necessary decisions and changes to face a new reality.

This is what the World Economic Forum is proposing through the “The Great Reset” initiative, which calls for the need to create the new foundations of an economic and social system that will enable a more just, sustainable, equitable and resilient future. And in this future, companies have a fundamental role to play, making it urgent to review their business models, their management and their relationship with the environment.

There has been a recent debate on the social commitment of companies. While some point out that they should refer to their purpose of doing business, others believe that companies should be a “good citizen”, orienting their business with a special consideration for the environment and how to contribute to it. So, in a context of crisis and need for change, in which inequality has been laid bare, the transition towards sustainable business – assuming this role of good citizenship – becomes urgent.

Corporate sustainability seeks that the company’s activity is carried out in balance between economic, social and environmental aspects, creating value, but not in an altruistic or charitable sense. It is clear that every business has an economic interest, and it is precisely this interest that will benefit if the company adopts a way of being and acting in tune with its surroundings, being conscious of resources and seeking to have a direct impact on the life of society and communities.

In fact, environmental, social and governance (ESG) criteria have recently gained strength, indicators that guide the business towards a responsible performance, where investors can better manage risk by integrating these three factors, which in turn will allow them to have a better financial health and be “worth” more. This is because companies that invest in ESG criteria and have sustainable practices have better investment prospects and are more profitable.

In this context, I would like to zoom in on the “G” of governance, which is linked to compliance – which should be part of the heart of companies – and the importance of how things are done. This criterion focuses on how the company is managed, from the formulation of policies to the distribution of rights and responsibilities, including all stakeholders. This will allow investors to see the company’s compliance capability, the leadership of the CEO and his managers, to know its goals and metrics, organizational culture, its crime prevention model, audits and strategic planning.

It is time for companies to “reboot”, satisfying the needs of the present, without compromising the future and increasing the welfare of the chain that is linked, in one way or another, to the business (stakeholders), and act globally, leaving aside individuality, looking at the whole of society, respecting the environment and becoming part of the solutions and not the problems. Although it is not easy for all companies to apply all ESG criteria, it is possible to start with G and emphasize solid and robust governance, with risk management and control capacity.

Today is when we must take charge of the signals that the economic, health and social crisis is giving us, and see sustainability as a way to synchronize with society.

By Susana Sierra

Source: La Tercera