Our focus is ESG analysis with supply chain financing, you know. We have launched a new product, ESG assessment for SMEs, large companies and funds/financial institutions. It fits all companies that want to assess their ESG performance, risks, obtain a rating and/or rank their partners, considering several internationally accredited assessment parameters and metrics in a fast, efficient and low cost way. What are the advantages for a company to do an ESG assessment of its operation?

Here at arara, we have developed a proprietary taxonomy that considers aspects of climate issues, governance, labor relations, environment and social issues, and measures climate performance (electricity consumption, water, waste, emissions, etc.) in line with the most globally recognized international ESG standards. The same research can be applied just to business partners: suppliers (for companies), investees, and clients (for funds and financial institutions). We can list several reasons for the value of an ESG assessment: to have risk management; to be accepted as a supplier to companies requiring ESG standards; to have a differential to attract business and obtain financing; to obtain transparency and adequacy to the increasingly strong demands from stakeholders, especially from regulatory bodies that are stricter, as we showed in the previous post. The cost of not knowing your risks and mitigating them is to be penalized. All these agents are foreseeing sanctions for companies that do not follow the ESG pillars. Fines and the possibility of revocation of operating licenses and criminal impacts, depending on corporate environmental and labor practices. Try it, we have a free preliminary ESG assessment plan and more comprehensive plans according to your needs on our website www.arara.io.

The requirements in Brazil are very much in line with the recent policies of the Securitires Exchange Commission (SEC), the regulator of the US capital markets. The proposals seek to categorize certain types of ESG strategies broadly and require funds and advisors to provide more specific information in prospectuses, annual reports, and advisors’ brochures based on the ESG strategies they pursue. Rather than punishing, the idea is to make good and bad followers visible, to make communication simple, and to make reports come to public attention. In the end, companies that don’t comply will suffer a relevant squeeze from authorities, investors and society. As Gary Gensler, director of the SEC, said, if it is easy to know if milk is skimmed just by looking at the label, it is high time to facilitate access to information to check if a fund that claims to be green or sustainable really is. The stricter rules should come into force in 2024, in the United States.