Very important concepts such as what ESG is are gaining more and more evidence in the market and adding value for the companies that adhere to the suggested practices.
In a recent survey, Bloomberg estimates that the ESG agenda should attract US$53 trillion in investments by 2025. In other words, in addition to being a trend, ESG compliance is increasingly becoming a prerequisite for competitiveness.
In another survey conducted by the Boston Consulting Group, the number of companies that have stood out because of good sustainable practices is growing. In this sense, adopting measures that address and respect inclusion issues, for example, gain more space, because they are engaged with issues of social relevance.
Gender diversity, practices beneficial to the community and also to nature, as well as in relation to ethics and brand transparency are themes that guide ESG actions. And this in the scope of the communication of this initiative with its public, and also with internal collaborators, partners, and suppliers, and, mainly, regarding the impact the brand has on society.
ESG as a competitive differential
ESG, which is gaining attention at the moment, is the translation for "environmental, social and corporate governance" best practices. In other words, companies need to take initiatives to protect natural resources, reduce the emission of pollutants, and positively impact the environment.
ESG has become a competitive advantage for industries that adhere to the suggested best practices. These organizations, closely watched by a society that is increasingly critical and organized for change, recognize that their role cannot be restricted to their own business. But to also get involved with agendas that directly impact social causes and, consequently, in the market's evaluation.
And this new posture should gain more supporters every day, since the demand for companies committed to sustainability should grow considerably due to the change of attitude of the consumer and, consequently, of the market. Thus, industries that anticipate this trend should gain a competitive edge in this moment.
The ESG fund and the investor
Due to the growth in the adoption of these parameters by companies, several ESG funds have appeared on the market. And the proposal is to offer the investor a safe portfolio. These funds represent an interesting opportunity for those who want to invest and value companies with social, environmental, and corporate governance responsibility.
According to Quantum Finance's research, which considers all the funds governed by CVM Instruction 555, which indicate the use of ESG criteria as part of the selection of the assets that make up their portfolio, the five ESG funds that had the best performances in the first half of this year were
1- The multimarket fund FPI INVESTIMENTO NO EXTERIOR had a profitability of 22.5% from January this year until June. It is managed by IDGR Investimentos.
2- The multimarket fund SANTANDER GO GLOBAL EQUITY ESG REAIS INVESTIMENTO NO EXTERIOR FI MULTIMERCADO, with a return of 17.1% and managed by Santander Brasil Asset Management,
3- The MANAGER JSS SUSTAINABLE EQUITY EQUITY GLOBAL THEMATIC INVESTMENT OVERSEAS fund, with a return of 14.3%. It is managed by Safra Asset Management.
4- The TREND LIDERANÇAS FEMININAS FI multimarket fund, which gave its shareholders a return of 13% in the period and is managed by XP Asset Management.
5- And, finally, FRAM CAPITAL HANSSEN ESG FI AÇÕES, fund whose return was 11.2% between January and June this year. This one is managed by Fram Capital.
And the Brazilian market follows this trend and understands the importance and the potential of the ESG as a management model and also the potential for profitability. Trend ESG Global is the first fund of this category to integrate the XP Investimentos catalog. Since it is a passive income fund, it follows reference indexes of ETFs that count on companies inside and outside the country.
The business opportunity extended to startups
Technological advancement is in line with the new practices. And in Brazil this has been happening in a very favorable way, with the creation of startups focused on this segment that meet this need for technological solutions in ESG.
According to data from the Inside ESG Tech Report, of July 2021, 740 startups were mapped in this area. Of these, 72 focus on the circular economy. And, if compared to 2000, when only 23 initiatives operated with this purpose, the advance is very relevant.
The current survey shows that 17.4% of the solutions presented involve the rational use of water and energy. An extremely important agenda, especially considering the current moment in which the country is going through an energy crisis. The survey also shows startups with actions directed to areas such as customer relations, transparency, and communication, amounting to 14.52%. In other words, side by side with the companies' posture of solving social, environmental, and governance problems. The ESG motto.
In this sense, startups meet this need for a change of attitude, more humanized, concerned, and respectful of the environment and its natural resources. And this is why they receive more attentive looks from these investors or the holders of these funds. Because they offer clean, renewable and profitable alternatives to industries, especially when they have technology that not only generates less waste, but also takes advantage of this waste and turns it into more energy, as is the case with Prosumir's Pressure Reducing Turbine.
The TRP guarantees energy efficiency of up to 10% of electricity consumption, reduces operating costs and generates renewable energy that reduces CO2 emissions. In other words, an alternative that meets the needs of industries that want to adhere to ESG practices.
Prosumir operates in the energy use market with innovation projects for power generation, cogeneration, and energy efficiency. And all this with a view to a more sustainable society.