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ENVIRONMENTAL part is a commitment to nature. Companies must have sustainable initiatives, such as energy efficiency, circu- larity of materials and waste management, the use of green energy and the reduction of carbon emissions.
SOCIAL focuses on human beings, labor relations, diversity, inclusion, equal oppor- tunities and support for communities. Your actions must prioritize a healthier work environment; combating moral harassment in companies; policies on equality of sex, age, religion and sexual orientation; a fair and market-compatible salary policy; valuing and encouraging the community; combat child and slave labor.
GOVERNANCE refers to the way compan- ies are managed by their managers. Transpa- rency in financial reports, the independence of supervisory bodies, the implementation of anti-competitive practices, the fight against corruption and compliance with ethical and legal standards are the main corporate governance criteria and are crucial to building and retaining stakeholder trust.
Companies that implement ESG practices are contributing not only to their future, but also to the planet.
We highlight some benefits:
* Competitive advantages over competitors;
* Attract more investors;
* Better financial performance;
* Greater customer loyalty;
* More sustainable business operations.
Currently, only large companies have a legal obligation to report their practices, and there are already European standards and specific indicators that these companies must use and disclose.
SMEs are not (yet) required to legally report their practices, but they are beginning to be pressured by their customers, investors and financial systems to incorporate ESG themes into their strategy, policies, practices and management indicators.
In reality, many companies that are clients of SMEs, as well as banks and financiers, are beginning to create internal assessment systems to assign an ESG rating or ranking to SMEs, which transforms ESG themes into competitive and differentiating factors for companies.
Banks face a more demanding regulatory context in which financing has to consider ESG data.
The absence of this data by companies may condition their access to financing and, conversely, the existence of some indicators will be seen as a sign of increasing maturity.
By 2024, due to the regulatory calendar, it is expected that companies with banking exposure will be asked to provide ESG information, within the scope of credit attribution processes.
Due to European requirements, all banks operating in Europe will have to publish a new indicator - Green Asset Ratio (GAR) - which reflects the proportion of credit granted to large companies relating to
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