The relevance of Corporate Security in the ESG Agenda
Wendel Correia, Head of Latam Corporate Security & Global Anti-Illicit Trade Head, Syngenta Group
Wendel Correia, Head of Latam Corporate Security & Global Anti-Illicit Trade Head, Syngenta Group
Environmental, social and governance practices (ESG) has gained prominence in the corporate world. Clients and Investment funds have considered companies that are following the best practices of the ESG pillars when choosing who they want to work with.
In this reality, focused on environmental and social sustainability, security practices are even more important. But after all, what does ESG represent and how it is linked to your company´s Corporate Security practices?
What is ESG?
We can define ESG as a set of good practices of an organization from the point of view of sustainability. The acronym for Environmental, Social and Governance refers to the environmental, social and governance pillars on which organization should focus.
The term ESG originates from the capital market. It has become a reference for investors in analyzing the sustainable practices of organization where they plan to invest. Companies that ignore this reality and do not invest in sustainable practices are already considered unsafe to receive investments.
Although the concern with sustainability is not new, the ESG has changed its level of relevance to the business. To the point of being considered indispensable to guarantee competitiveness and value to companies. Currently, there are already investment funds aimed exclusively at companies with positive ESG performance.
The ´G´ in ESG
The Governance pillar refers to how a company is led and managed. ESG analysts will seek to better understand how leadership´s incentives are aligned to stakeholder expectations, how shareholders rights are viewed, and what types of internal controls exist to promote transparency and accountability by leadership.
An example that permeates in this pillar are the Data Protection Regulations adopted in Latin American countries. From its entry into force, organizations are adapting to the law and from that, having more concern and responsibility in the treatment of personal data that they have in their databases.
According to Interpol In the first half of 2020, Latin America recorded the world´s highest cyber-attack rates, with nearly three times more attacks via mobile browser than the global average. Hence, information security and data privacy and protection has become another of the biggest and newest ESG concerns of the moment.
Organizations must protect themselves against risks, not only because of the cost that attacks can cause, but also because of the cost of lost opportunities, bad reputation in the market and administrative sanctions in possible disagreements with the Data Protection Regulations.
The ´S´ in ESG
The Social pillar of ESG refers to the company´s relations with the community in which it operates. This includes all stakeholders, such as customers, suppliers, and employees. Practices that focus on good relationships with the community, respect for human rights and customer rights for example, count points for the company.
According to the United Nations Interregional Crime and Justice Research Institute (UNICRI), Illicit Pesticides counterfeit markets surpass 10% for most types of products. According to the Institute for Economic and Social Development of Borders (IDESF),the trade of illegal agrochemicals represents about 24% of the pesticide market in Brazil. This poses real and serious risks to farmer´s health, consumers, the environment, and sustainable agriculture. Furthermore, according to the Transnational Alliance to Combat Illicit Trade (TRACIT), it negatively impacts 09 (nine) of the UN Sustainable Development Goals.
The Esg Has Changed its Level Of Relevance For Business to a Point of Being Considered Indispensable to Guarantee Competitiveness and Value to Companies
With the Covid-19 pandemic, people changed their shopping habits as result of lockdowns. This caused an increase in E-commerce purchases and a considerable increase in e-Commerce exploitation.
Organizations should protect their clients from becoming victim of crime and their intellectual property by implementing measures to deter, detect, and respond to illicit trade.
It involves strong market surveillance both, in the online environment and offline environment. Monitoring your brand in the online environment will bring valuable insights to shape your response to the challenge. Strategies may include tracking flow of illicit goods using open-source information. Furthermore, practices such as mystery shopper is recommended.
Close cooperation with Law Enforcement agencies is crucial. By providing intelligence data, supporting investigations, and collaborating in programs of capacity building in the region will strengthen the position of your brand.
Enforcement strategies plays an important role in the strategy. Companies should, always, take administrative, regulatory and/or criminal action against infringers. Although in some countries it may appear to be a challenge, a well-planned course of action will bring results in medium term.
Several organizations have already incorporated the Key Performance Indicators resulted from their security programs in their Business Sustainability Reports. This is to help to define success well beyond profit and sales. Have you ?
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