Sonia Consiglio Favaretto, Chair of the Corporate Sustainability Index Committee from BM&FBOVESPA takes us through its updated sustainability guide.
As they are at the heart of capital markets, exchanges have a crucial role in fostering best practice among publicly-traded companies, constantly raising their financial and intangible values in terms of corporate governance, socio-environmental management, talent development, and others. As we know, this intangible is having ever more of an impact on companies’ market value.
One of BM&FBOVESPA’s main strategies, therefore, is to invest in training and development initiatives for its listed companies, with an emphasis on sustainability. This particular focus is required because the impacts of socio-environmental risks and opportunities in the traditional corporate environment are not clear yet.
Intangible values such as corporate governance, socio-environmental management and talent development are having ever more of an impact on companies’ market value
With this in mind, in 2011 we launched the first version of the ‘New Value – Corporate Sustainability. How to Begin, Who to Involve and What to Prioritize’ sustainability guide, which has now been updated. The principle new feature of this second edition is the inclusion of international sustainability indicators in line with proposals from Sustainable Stock Exchanges (SSE)*, the World Federation of Exchanges (WFE), the Global Reporting Initiative (GRI) and Corporate Knights Capital. In April of this year, the same content was adapted to create a guide focused on closed-capital companies.
The latest edition of the New Value Guide maintains essential elements such as a timeline mapping the evolution of corporate sustainability and the ‘13 steps towards sustainability’, which are instructional proposals for implementing these concepts at companies. These steps encompass: involving everyone in the organisation, setting targets and priorities, developing a Sustainability Policy, stakeholder engagement, and reporting achievements and challenges. The Guide’s preface was written by Fiona Reynolds, Managing Director of the UN’s Principles for Responsible Investment (PRI) and the guide is available here.
One of SSE’s main areas of work is for publicly traded companies to develop sustainability guides through the ESG Guidance Campaign. This encourages the world’s stock exchanges to publish and therefore foster the adoption of best Environmental, Social and Corporate Governance (ESG) practices, as well as transparency regarding this information. According to SSE data, this year alone there has been an increase to 15 from 11 exchanges with sustainability guides. Another 23 exchanges, meanwhile, have committed to publishing them by the end of 2016.
When companies decide to make sustainability concepts part of their business, they soon realise this is a race without a finishing line. New demands arise every day, leading to a process of permanent evolution. The commitment and support of the company’s top management, including its Board of Directors, therefore makes all the difference. After all, granting social and environmental factors the same status as financial ones in business strategy and management is never going to be an overnight change. It presupposes understanding, awareness and, consequently a change of culture which must emanate from, and be inspired by, top management, in order to be true, deep, resounding and sustainable. Shall we adopt this ‘New Value’?
* Sustainable Stock Exchanges (SSE): a United Nations (UN) initiative headed by the United Nations Conference on Trade and Development (UNCTAD), the Global Compact, the Principles for Responsible Investment (PRI) and the United Nations Environment Program Financial Initiative (UNEP-FI).