We invite you to read the column written by our Legal & Business director, Stephanie Cruz, where she addressed the challenges that companies will face this 2025 in ESG in Chile.
Today, environmental, social and governance (ESG) criteria are going through difficult times, given the different policies that are emerging around the world. Despite the different currents that are emerging, it is important that companies continue to focus on this. In this context, during this year, there are three key challenges that companies will have to observe in order to move forward in the right way.
The first major challenge will be in the identification and management of ESG risks. A recent study by KPMG revealed that, although more than 90% of large companies in Chile report their sustainability performance, there are major gaps in the identification of key risks. For example, only 38% identify social risks, which indicates a lack of integration of aspects such as labor rights, impact on communities and diversity in their ESG strategies.
This can lead to reputational problems, loss of investment and difficulties in retaining talent. To address this challenge, it is essential that companies conduct a comprehensive risk mapping, which includes each of the ESG metrics.
The second major challenge is related to increased regulation. One example is the recent publication by the Financial Market Commission (CMF) of General Rule No. 519, which updated Rule 461 which, in 2021, had introduced specific requirements for sustainability reporting by supervised entities.
The new regulation further strengthens the requirements around ESG criteria. Companies must carefully review the new demands, with a special focus on those criteria that need to be further advanced. This year will be particularly important in this regard.
The third great challenge lies in measurement, which is not being carried out effectively by a significant part of the companies in our country. An example of this is the latest study by Acción Empresas and Azerta, where, although 71% of respondents said that the development and implementation of a comprehensive sustainability strategy has been key to building a good reputation in terms of ESG, only 41% said that the integration of ESG indicators in corporate KPIs also contributes to this objective.
This challenge is accentuated because many companies do not have clear metrics or the right monitoring tools to assess these risks on an ongoing basis. In that sense, after establishing clear KPIs, technology -such as artificial intelligence, data analytics, blockchain, among others- represents a great opportunity to measure not only effectively where improvement is needed, but also continuously.
These challenges show that ESG management in Chile needs to evolve faster to meet global standards and respond to the growing pressure from investors and regulators. Given the importance of this issue for the growth of every business, companies in Chile have no time to lose.
Column written by:
Este desafío se acentúa porque muchas compañías no cuentan con métricas claras ni con herramientas de monitoreo correctas para evaluar estos riesgos de manera continua. En ese sentido, luego de establecer KPIs claros, la tecnología -como la inteligencia artificial, data analytics, blockchain, entre otras- representa una gran oportunidad para medir no solo de forma efectiva dónde se debe mejorar, sino que de manera continua.
Estos desafíos muestran que la gestión ESG en Chile necesita evolucionar con mayor rapidez para cumplir con los estándares globales y responder a la creciente presión de inversionistas y reguladores. Ante la importancia que tiene este tema para el crecimiento de todo negocio, las empresas en Chile no tienen tiempo que perder.
Columna escrita por:
Stephanie Cruz | Director Legal & Business | scruz@az.cl
