Mining, agribusiness and steel industry lead the advancement of ESG initiatives

In the eyes of stakeholders, the mining, agribusiness and steel sectors have been investing in initiatives that meet ESG criteria. In addition to rethinking and adjusting their compensation models, companies highlight resources for independent analyzes that help them identify areas for improvement and change processes to reach maturity.

“This movement is due to the increased expectations of investors, customers, employees and regulators, but also of society”, says Ronald Bozza, partner at BR Rating, the first rating and evaluation agency for corporate governance systems (Rating) in Brazil and one of the main independent rating and assessment agencies for the degree of ESG maturity

He cites as an example the adjustments to remuneration models linked to the ESG theme for both ICP (Short-Term Incentive) and ILP (Long-Term Incentive) programs. And it highlights that in the US, more than 50% of companies are using or considering adopting ESG metrics when designing their executive compensation packages to hold leadership accountable for delivering sustainable goals for their business.

In Brazil, among companies that use ESG metrics, between 10% and 20% include the goals in their compensation programs. And this covers not only senior executives, but also all participants in the incentive plan. “Despite their small relative weight in determining variable rewards, programs that use ESG metrics can be designed to reinforce the desired behavior across a company’s entire workforce,” he assesses.

Mining, metallurgical, steel and agribusiness companies stand out on this path. These are sectors that already invest in identifying metrics in business management. “Although the rules may vary from case to case, these are areas more likely to prioritize the environment and, therefore, more dependent on due diligence, which ends up extending to other aspects of ESG”, he says.

An example is the Sobrex Group, owner of the Línea, Elfer, Cecil and Abluo brands and an important player in the Copper and Aluminum markets. The group has just completed its first independent ESG analysis. “Our objective was to seek a diagnosis to understand where we are in terms of ESG and which points should be improved. The search is for excellence", explains the president of the Board of Directors, Maria Antonietta Cervetto.

The methodology used was developed by BR Rating in partnership with PROWA, a consultancy specializing in sustainability. The level of ESG Maturity is analyzed through 561 questions divided into 18 Themes, 5 in the Environmental Pillar, 8 in the Social Pillar and 5 in the Governance Pillar.

The work highlights the main gaps and highlights, and recommends a road map for the organization to advance its level of ESG maturity. “This includes issues ranging from direction on the Board of Directors to operational implications, demonstrating financial impact and the value of the organization, in addition to benefits such as access to credit, ability to attract talent and reduction of risk and interest for financing investments” , adds Bozza.