The ESG criteria -social environment and governance, for its acronym in English- are sustainability criteria. ESG and their importance for renewables comes into play when looking for investors or investing in a company to promote responsible investment.
These criteria are especially important for renewable companies as they reflect their sustainability. Some of the main objectives that these criteria seek to promote are the proper management of resources and the prevention of pollution. In addition, they prioritize transparent reporting and the use of clean, renewable energy as a source of profitability.
In recent years, the environmental factor of these three criteria has received special attention. Due to the challenges we face with climate change, investors are choosing to play more rigorous screening protocols and a critical role in how they allocate their capital to support environmental goals.
It is vitally important for renewables to prioritize social factors in their ESG criteria and not just focus on environmental ones. Companies in the renewable energy sector must pay special attention to having employees and collaborators in various fields, since a multidisciplinary team will be key to the success of any project. By having experts in the social and governmental area, in addition to the environmental area, the company’s activities will be integrated without setbacks.
The benefits that these criteria can generate offer added value for any investor, generating opportunities for expansion and greater liquidity. Renewables are key within this group of criteria, since they are the ones that are most aware of the global context and the benefits that good ESG practices represent. Likewise, they generate a good positive image in front of environmental activists and social organizations.
