Planning, Compliance and ESG

End cycles, close doors, end chapters. A new year is a good opportunity to start over! Jump 7 ripples, wear white clothes, eat lentils, toast with champagne, eat grapes … plan!

New Year’s traditions invite people to reflect on the year that has passed and also to set goals/objectives for the year that is about to begin.

The human being needs new beginnings, whether at the end of a task, a day, a week, a month, a year. We have to “make peace” with our immediate past, to move forward. Our dependence on restarts has Daily implications, which we observe in various behaviors, such as at the beginning of a diet (no one starts a diet if not on Monday), habituality of exercise, among others.

With companies it is no different, so the beginning of the year is marked by meetings to present the objectives of the year and the planning to achieve them. This presentation at the beginning of the year is the “top of the iceberg”, the visible part, of a constant and essential work of “thinking about the future”!

Setting goals and structuring small tasks to achieve them is not an easy task, it needs the entrepreneur to know not only techniques for setting goals and planning, but to really know your company and its future (mission, vision and values are also essential), which includes: Team, customers, market, competitors and finance.

“If you know the enemy and know yourself, you need not fear the outcome of a hundred battles. If you know yourself but do not know the enemy, for every victory you win you will also suffer a defeat. If you know neither the enemy nor yourself, you will lose all battles.”Sun Tzu. The Art of War.

In addition to giving direction to the social exercise of companies, the goals have a very interesting point in common: they are all measurable. There is no point in setting an immeasurable goal, it is like jumping waves and asking for money (money does not come, I have already tried), we need work and strategies for the efficient use of the resource time!

When we bring this concept to companies, in some (more structured) the task is easier, now for others (with little professionalization, such as family businesses) it is an impossible mission if the executives have not done their homework.

Homework requires transparency, good financial health, engagement and legal compliance. The first 3 will only be solid and reliable if the latter is up to date, since compliance is ensuring that business practices are in accordance with internal statutes and regulations, as well as laws in general.

Legal compliance or, for those who like foreignness, “compliance”, since the Brazilian corruption scandal in 2015 (watch the movie “The Laundry”), continues on the agenda in the most diverse companies, both to improve corporate governance rules and to monitor how companies have acted in favor of social objectives (such as ESG – Environment, Social and Governance).

The concern with the social and environmental impact of companies is the size that the World Economic Forum launched at the 2020 Annual Meeting in Davos, a guide to metrics based on ESG values, reinforced practice in the following 2 (two) years.

The adoption of ESG practices has proven positive to attract investment, generate value for consumers and positive impact on workers, for this reason these practices have been included in business planning and should remain so for the next few years. The implementation of ESG practices is not a one-off, it takes a continuous effort. It’s like exercising, don’t just do it once!

The inclusion of ESG practices in business planning occurs through the effective implementation of measures concerned with its three pillars, namely:

Environmental compliance: company actions focused on the environment (here it is not only pollutant reduction, but also: concern with recycling, clean energy, conscious use of Natural Resources);

Social compliance: the organization’s attitude towards social factors such as: inclusion and diversity, Labor Relations, healthy work environment;

Governance compliance: independence and diversity of the board of directors, adequate remuneration policy, transparency, ethics, anti-corruption practices, data protection and Privacy.

Finally, although tempting for inclusion in the plan of goals and objectives of 2023, ESG practices must be effective, Greenwashing (having a different discourse from the practice), in addition to destroying credibility, can generate boycott campaigns, in addition to being considered as misleading propaganda.

Leonardo Theon de Moraes-lawyer, graduated in law, with emphasis in business law, from Universidade Presbiteriana Mackenzie (2012), enrolled in the Brazilian Bar Association, São Paulo Section (OAB/SP) (2012). Postgraduate and Specialist IN Business Law from the São Paulo Law School of the Getúlio Vargas Foundation (2014), Master in political and Economic Law from the Mackenzie Presbyterian University (2017), author of books and articles, Lecturer, University professor and member of the São Paulo Lawyers Association (AASP). Founding partner of TM Associados.