Sustainability is not an idealistic goal. Rather, it is increasingly a necessity for business. That’s why, starting this year, Latin Trade will recognize the companies in Latin America that are the most outstanding in sustainability.
Sustainability is a critical issue for the 21st century. Businesses have to prosper and grow as much as they can so they can meet clients’ needs without eroding the social and physical environment. That is what countries are increasinglyasking for, and it cannot be otherwise.
The numbers show that sustainability isn’t an idealistic proposition. More and more, it is a necessity for all businesses. For example, an article published in 2015 in the Journal of Sustainable Finance brought together the data and results of 2,000 studies and showed that companies that are strong in social, environmental, and corporate governance issues (ESG) have better financial and operational performance, and when they are listed on a stock exchange, a higher market valuation.
The Boston Consulting Group report that Jorge Becerra presents in his column shows that the best companies in ESG from four sectors – packaged consumer goods, biopharmaceutical products, oil and gas, and banking – obtained multiples of valuation between 3% and 19% higher than the average for their sectors.
Social conditions also require sustainability. Lourdes Casanova, in her column, shows how the growth of poverty and the widespread prevalence of corruption threaten Latin America’s future. “It is urgent that business management become part of the solution to the region’s social problems.”
The Inter-American Development Bank (IDB) has championed promotion of sustainability among Latin American companies. In 2016 the bank established a benchmark, the IndexAmericas, to quantify companies’ performance in practices favorable to the environment, society, corporate governance, and economic development. Using a battery of 400 indicators, the 100 best performers in these areas were chosen from a universe of 6,000 firms whose shares are traded on the regional stock exchanges.
Building on the impressive methodology of the IDB, this year Latin Trade selected the best among those 100 corporate leaders to recognize their work with the LATIN TRADE INDEXAMERICAS SUSTAINABILITY AWARD.
With this prize, which we will award every year, we want to support the proposition of the Bank and of many other players linked to the sustainability movement. The prize aims to highlight best practices, raise the standards of environmental and societal responsibility and corporate governance, and recognize the contribution to economic development of the best companies in the region.
Welcome, businessmen, to the 21st century. In this issue of the magazine, we enthusiastically recognize the best. The next step is to learn from their lessons and, perhaps even more important, to add your company’s name to those that have chosen to make sustainability the focus of corporate action.
This article was published in WEF 2018 edition of Latin Trade