ESG, the mainstream term, refers to a set of standards for a company’s operations that impact both the environment and society, covering Environmental, Social, and Governance aspects. In short, ESG criteria consider how a company manages its environmental impact, treats its employees and stakeholders, and whether it is transparent and accountable in its operations.
ESG’s relevance in the global marketplace has grown significantly in recent years as consumers, investors and corporations recognize the importance of sustainable and responsible business practices. This has led to a growing demand for products and services that meet ESG standards, as well as a growing interest in investing in companies that prioritize good practice.
In the stock market, ESG has become a significant factor in investment decisions, as investors increasingly look to companies that not only prioritize financial performance, but are also mindful of potential environmental and social impacts.
As awareness of ESG continues to grow, its relevance in the stock market is likely to continue to increase, with investors and consumers increasingly looking to companies committed to sustainable and responsible practices.
In the context of Agro, the ESG refers to the environmental and social impact of agricultural practices. This includes several factors that permeate good practices, such as the rational use of water resources, soil conservation, animal welfare and good working conditions. By applying ESG principles to their operations, Agro companies can ensure they are operating in a sustainable and responsible manner, both for the environment and for their stakeholders and shareholders.
Studies have shown that sustainable agricultural practices can bring many benefits to both the producer and the environment, demonstrating the tangible benefits of applying ESG principles in agriculture. According to FAO (Food and Agriculture Organization of the United Nations – 2022), livestock contributes 40% of the global value of agricultural production and sustains the livelihoods and food and nutrition security of nearly 1.3 billion of people. At the same time, there is ample scope to improve practices in the livestock sector so that they are more sustainable, more equitable and present less risk to animal and human health.
The transformations that accompany growth are an opportunity to lead the livestock sector towards more sustainable development and a better contribution to human nutrition (World Bank, 2022).
The adoption of ESG practices in agriculture can be beneficial for both the producer and the environment. For producers, ESG can lead to greater efficiency and cost savings, better access to capital and a better reputation among consumers. Furthermore, by adopting sustainable practices, producers can improve and maintain the long-term health of their land, ensuring that it remains productive for future generations.
For the environment, ESG in agriculture can help reduce the negative impacts of agricultural practices. For example, by reducing the use of water and agrochemicals, and improving land use and conservation, producers can help protect local ecosystems and biodiversity. Furthermore, by implementing responsible and sustainable practices, agriculture can help mitigate the adverse effects of climate change and reduce greenhouse gas emissions.
In short, adopting ESG practices in agriculture is a win-win situation, improving both the economics of agriculture and the health of the planet.
Be a part of it! Improve your environmental, social and governance performance and credibly declare your commitment with Neocert’s Score ESG.
We evaluate the ESG performance for your Agribusiness company, based on material topics relevant to the sector, which presents the result of the process with dashboards that allow you to explore and graphically visualize your performance data throughout the harvest year. For the specific case of beef and dairy cattle, Neocert developed, in partnership with Prodap, an ESG performance assessment service specific to the sector.
Improve and declare in a reliable, safe and transparent way your company’s socio-environmental performance regarding the adoption of good ESG practices.
Be a part of Neocert.