This is how the 10 largest companies in Latin America focus on ESG

ESG refers to the three pillars of sustainability—environmental, social, and governance—that impact the long-term success of a company. Environmental factors include a company's carbon footprint, waste management practices, and resource conservation. Social factors include labour practices, human rights, and community relations. Governance factors include transparency, ethics, and leadership.

As more and more consumers, investors, and stakeholders become aware of the importance of ESG, companies are focusing more on these factors in their business practices. Some of the ways that companies are incorporating ESG into their strategies include:

• Setting sustainability targets: Many companies are setting specific, measurable targets related to ESG. This can include reducing their carbon emissions, improving working conditions for employees, or increasing transparency in their supply chain.
• Sharing information: This includes publishing sustainability reports that outline their progress on ESG goals, as well as their challenges and areas for improvement.
• Investing in sustainable technology and practices: Many companies are investing in sustainable technologies and practices that can help them reduce their environmental impact and improve social outcomes. For example, some companies are investing in renewable energy, green building design, and sustainable agricultural practices.
• Engaging with stakeholders: Companies are engaging with stakeholders, including employees, customers, and community members, to better understand their needs and concerns. This can help companies identify areas where they can make a positive impact and build stronger relationships with stakeholders.
• Collaborating: Companies are also collaborating with others, including other companies, governments, and NGOs, to drive positive change. For example, some companies participate in industry-wide initiatives to reduce carbon emissions or improve working conditions.
• While the specifics of each company's ESG focus will vary, the above strategies are some of the common approaches that companies are taking to integrate ESG into their business practices. By doing so, they are building stronger, more sustainable businesses that are better equipped to meet future challenges.

Learn more about ESG reporting

ESG in Latin America

Latin America is no exception. As consumers, investors, and stakeholders increasingly demand sustainability and corporate social responsibility, many larger companies are ramping up their efforts to address ESG matters. Among the largest companies in Latin America, these 10 are focusing on ESG, and we will briefly explore what this means for the future of the region.

1. Ambev, the largest brewery in Latin America, has made ESG a key part of its business strategy. The company has set a goal to be carbon neutral by 2025 and to reduce its carbon footprint through renewable energy sources. Ambev implemented sustainable agricultural practices and the responsible management of its water resources. Ambev also strongly focuses on social responsibility and is committed to investing in communities. It has reduced water consumption in plants by 55% in the last 18 years, exceeding the water efficiency target established for 2025 in 2021. As a result, the average for each litre of beer produced fell from 5.36 litres of water to 2.4 litres.
2. Bancolombia, one of the largest banks in Colombia, has defined the Sustainability Model that includes policies of purchases, human rights, climate change, financing, investment, relationships with stakeholders, and social and environmental goals. In addition, the bank developed and implemented a complete dashboard of environmental key performance indicators. In 2020, Bancolombia became the first Colombian financial institution to join the Partnership for Carbon Accounting Financials (PCAF) to measure and disclose the carbon emissions impact of investments and loans.
3. Itau Unibanco, one of the largest banks in Brazil, has made eight ESG commitments, from increasing lending to sectors which have a positive impact on the planet to expanding the offering of responsible investment products and services. Itau Unibanco also launched several initiatives to promote environmental sustainability, such as creating a ‘green bank’ that provides financing for renewable energy projects.
4. Petrobras, one of the largest oil and gas companies in Brazil, aims to be ‘the best energy company in value generation, with a focus on oil and gas, sustainability, safety, respect for people and the environment’. Petrobras has set targets to reduce total operational emissions by 25% by 2030, carbon intensity by 32% by 2025, and fresh water collection by 50% by 2030. It also launched several initiatives to promote environmental sustainability, such as creating a ‘green oil’ program that provides financing for renewable energy projects.
   
5. América Móvil, one of the largest telecommunications companies in Latin America, has issued sustainability reports annually since 2010. Its ESG portfolio includes creating a sustainability department, developing a sustainability strategy, and integrating sustainability into operations and business practices. It has set a net-zero emissions target for 2050, a 52% reduction target in scope 1 and 2 emissions by 2030 (from 2019), and a 14% reduction in scope 3 emissions by 2030 (from 2019). In 2022, América Móvil placed its first sustainable bond on the Mexican stock market.
6. Pemex, one of Mexico's largest oil and gas companies, made a major commitment to ESG in recent years. It includes the development of a sustainability strategy, the reduction of carbon emissions, and the promotion of renewable energy sources. Pemex also launched several initiatives to promote environmental sustainability, such as creating a ‘green oil’ programme that provides financing for renewable energy projects and two Ecological Parks: Jaguaroundi and Tuzandépetl.
7. Gerdau, one of the largest steel manufacturers in the world, is making ESG a key part of its business strategy. Gerdau is preparing to decarbonise its operations and set several sustainability goals, including reducing carbon emissions, promoting renewable energy use, and improving its employees' health and safety. Gerdau is also committed to promoting sustainability in its supply chain and is dedicated to reducing its environmental impact.
8. Banco do Brasil, one of the largest financial institutions in Latin America, is putting significant effort into ESG initiatives. The bank has set 10 sustainability goals, including reaching $24 billion in sustainable agriculture and $2.9 billion in renewable energy by 2025. It is increasing its lending to sustainable projects and promoting digital technologies to reduce its environmental impact. 
9. Embraer, one of the largest aircraft manufacturers in the world, is making ESG a prime part of its business strategy. It set several sustainability goals: 100% of electricity from renewable sources by 2030, carbon neutrality in operations by 2040, and zero-carbon aviation products by 2050. In addition, the aeroplane manufacturer implemented a robust Ethics and Compliance programme, fully aligned with global standards.
10. Vale, one of the largest mining companies in the world, is also making ESG a key part of its business strategy. It set several sustainability goals, including reducing 33% scope 1 and 2 emissions and 15% of its net emissions by 2035. Vale is also committed to promoting sustainability in its supply chain and is dedicated to reducing its impact on nature. It aims to become carbon neutral by 2050.
    

These companies demonstrate that ESG is not just a trend but a necessary part of doing business in the 21st century. By prioritising ESG, they are building stronger, more sustainable businesses that are better equipped to meet the challenges of the future. ESG is not only good for the environment and society, but it also makes good business sense. Companies that prioritise ESG are more likely to be seen as leaders in their industry and attract more investment, customers, and employees. As consumers and investors become more aware of the importance of ESG, we will see more companies in Latin America and around the world making it a priority in their business.

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