Why ESG?
The integration of criteria of environmental responsibility in the management of companies is a phenomenon that has accelerated notably in the last 2 years. While the trend is not new, there are several elements that have caused this recent trend. The main fact that placed ESG (Environmental, Social and Government) criteria on the agenda of the major global financial decision-makers was the decision of BlackRock’s senior management to bring its entire portfolio of invested companies to integrate mechanisms that would allow monitoring of its policies related to these three areas.
But, why these three topics?
The answer is that these areas are the main source of latent risks in your investments. Companies that do not have strict performance control in these fields, or do not have active strategies to achieve improvement objectives, pose an avoidable risk in their investment portfolios. It is easy to have environmental risks identified, but it is not the case of corporate governance or social risks, which can be minimized or go unnoticed by the organization as a whole.
Having a real concern about these matters makes perfect sense given the profile of BlackRock, one of the world’s leading investment management entities. They are in the capital of thousands of companies with multi-million dollar investments, and not always close enough to management, so that exhaustive reporting and strategic documentation are an optimal mechanism for that control.
The phenomenon generated by that decision has generated a tsunami of interest in the business world. But is it always justified? From Ayco we believe so. Beyond the confusion that exists about what the ultimate goal of integrating this practice is, we believe that aspiring to excellence in the management of the three areas described will make us a better company.
The real estate development and construction sector has a very notable impact, not only from an environmental point of view. From the social point of view, we have a direct impact on the life, dynamics and landscape of the places where we develop our promotions. We take the lives of hundreds of people to new environments, which in many cases receive that population as new. We commercially equip the spaces, conditioning the socio-economic dynamics. This externally, but internally we also have a responsibility over the team and group of people with whom we interact. And from the point of view of governance, both internally and in the practices of our relationship with our environment, we are also exposed to enough pressure such as needing to equip ourselves with a corporate strategy that makes those we want to do coherent with what we actually do.
Awareness of the importance of our decisions in these three areas prompts us to integrate high levels of self-demand into our management. That go beyond mere corporate social responsibility. An exercise of corporate responsibility that goes from the inside out. We see in the ESG criteria a way of systematizing this way of incorporating the scope of our impact, to try to generate as much as possible to achieve a better environment.