STORY INLINE POST
Q: What motivated you to establish ESG México Sustentable and how has the organization evolved over its 25 years of existence?
VG: We are a consultancy specialized in corporate social responsibility and sustainability management. Ximena has over 25 years of experience in corporate foundations and social responsibility. She has witnessed the evolution of corporate social responsibility over time. Our consultancy arises from the need for companies, especially large corporations, to expand their focus beyond shareholders and consider stakeholders and interest groups.
Society has begun to demand that companies be accountable for their actions and their social and environmental impact. This is where our consultancy comes into play. We specialize in identifying opportunities and sustainable business models, helping companies that do not have the concept of sustainability in their DNA make this transition. We have a solid conceptual framework to guide companies on their path to sustainability. We accompany clients throughout the entire process, from defining metrics to measuring performance. We focus on helping companies positively impact both society and the environment through the integration of sustainability into their daily operations.
Q: What are the biggest changes you have witnessed with your experience in corporate social responsibility?
XU: Corporate philanthropy used to be the main force in the field of social responsibility. Being socially responsible was limited to philanthropic acts, usually supporting NGOs. However, this approach was disorderly, as those in charge of NGOs were not always professional and the flow of resources depended largely on personal contacts. This lack of professionalism often resulted in mismanagement of resources and limited the impact of social responsibility strategies.
Over time, the environmental aspect of social responsibility began to gain prominence, marking a surge in social awareness. Additionally, a significant shift occurred in how companies treated their employees. Discriminatory practices began to be questioned and rejected. This change in mindset propelled a new wave of social awareness focused on non-discrimination and equality. Society also became more tolerant toward diversity.
The Sustainable Development Goals (SDGs) emerged in this context and became a kind of obligation for major organizations. It is now considered bad practice to limit oneself to supporting any NGO without a clear purpose. Organizations are compelled to establish a corporate social responsibility area. As we move forward, the social aspect of sustainability has significantly strengthened and has merged with the environmental and governance aspects to form a comprehensive approach to sustainability. The social dimension remains a fundamental part of what has historically been understood as corporate responsibility.
Q: How can organizations leverage customer behavior to impact their businesses?
VG: Bank of America has categorized Generation Z and millennials as the most disruptive generations in history. According to Bank of America, 75% of millennials want to invest in companies that align with their values, especially when it comes to inclusion. Consumers now have a sharper critical sense and information has become a powerful tool. Companies face a significant challenge in monitoring the evolution of consumer behavior as these new generations demand more than just a return on investment.
XU:The new generations are beginning to take on leadership positions in financial corporations. Legislation around ESG issues has intensified. Publicly traded companies are now obligated to be transparent about their sustainable practices.
Financing is increasingly linked to environmental and social responsibility. This trend goes even further. In Germany, for example, legislation has advanced to the point where suppliers are pressured to adopt good practices if they want to maintain business relationships with certain companies. Volkswagen and Audi have faced problems because they cannot guarantee that their suppliers in Mexico comply with Germany’s legal requirements, as their suppliers in the EU have not been established equivalents in Mexico.
Some countries like Chile, Argentina and Germany take an extended producer responsibility approach, in which product manufacturers take responsibility for their entire supply chain. They must report on the actions they are taking to produce sustainable products that can be presented to the public and have a measurable impact. This trend could pose challenges for Mexico if it cannot demonstrate compliance with appropriate responsibility certifications.
Q: What strategies does ESG México Sustentable recommend for companies to authentically communicate their corporate social responsibility efforts to consumers?
VG: Being sustainable does not necessarily entail the acquisition of large recycling facilities. Often, small changes, such as reducing paper consumption or implementing solar panels, have a significant long-term impact. Companies must avoid greenwashing and focus on real actions that have a genuine impact. Our main recommendation for companies is to carry out a comprehensive assessment, instead of simply buying certificates. The process begins with measuring the company to identify areas of opportunity. Then, we work together with the company to diagnose its production chain.
We offer support in two important aspects that are recognized internationally. First, we use Global Reporting Initiative (GRI) Sustainability Reports, which document the company's sustainable practices. Second, we use B Corp certification, a concept that originated in the US and now has a governing council that includes major companies from 180 countries worldwide.
XU: Many companies are concerned about conducting this diagnosis due to the fear of associated costs or potential negative results. However, what they often do not realize is that they might be already taking actions that could be considered responsible. It is also possible that they have implemented environmental responsibility strategies without recognizing that these actions are already generating a positive impact.
Q: In your experience, how can companies strike a balance between genuine corporate social responsibility and economic viability?
XU: Profitability is not in conflict with corporate social responsibility. There is a lack of understanding about what it means to be a sustainable company, starting with the fact that it is not limited to the environmental aspect. Moreover, it does not always require large financial investments. When companies analyze their supply chains, they often discover significant cost saving opportunities. We need to find a balance because sometimes we tend to overly criticize companies for what they do not do. It is also essential to understand that these companies make significant contributions to the local economy, paying taxes and generating economic benefits. This is the case with mining companies, which contribute to the prosperity of the region.
The challenge lies in ensuring that it is understood that the social aspect of a company involves both the corporation and its external environment. It entails considering how much it can collaborate to improve quality of life in its communities and generate a positive economic impact through active community engagement.
ESG México Sustentable is a Mexican consultancy dedicated to the creation, restructuring and management of corporate social responsibility and sustainability models.