M-Risk Blog 

Today, it is unquestionable that "companies seeking sustainability in their activities must know their stakeholders, enhance dialogue, meet demands and expectations, and be transparent in the accountability of their actions." In today's environment, "being connected" with stakeholders is an essential requirement for maintaining a competitive advantage. In fact, the proper management of a company's stakeholders is an essential pillar to ensure its long-term sustainability.  

When developing projects that may have an effect on the environment, companies in Chile submit their projects and their mitigation, compensation, or remediation measures for environmental impacts to an evaluation process in which the authority verifies their environmental viability. To enter this process, companies submit an Environmental Impact Statement (DIA in Spanish) or an Environmental Impact Assessment (EIA).   

In the business world, the integration of ESG criteria is no longer a mere trend but an imperative necessity. Concerns related to the environment, social issues, and corporate governance practices are gaining unprecedented relevance in decision-making for both investors and consumers. In this era marked by a growing awareness of the human impact on the planet and society, companies must adopt a more sustainable and responsible approach. 

Processing an environmental license can be a complicated and tedious process for any project. In 2021 alone, 936 projects were submitted for environmental assessment in Chile and only 521 of them were approved. The annual approval rate of 55% is similar in the rest of Latin America. Many of these rejected projects had problems obtaining permits, a highly influential factor in the success of a project. 

A robust ESG strategy can reduce the risks faced by an organization and increase opportunities, directly impacting the company's performance and valuation.

We can say that sustainability today is the protagonist in strategies and business models of companies. Organizations have realized that they must work on an integrated thinking that contemplates a strategic business vision linked to sustainability and with which they not only create lasting value for their shareholders, but also develop successful and lasting relationships with all their stakeholders.   

The last few years have been incredibly intense for the sustainability areas of organizations. Keeping up with the pace of change, and performing accordingly, has been a major challenge.  

Today it is a reputational requirement for organizations to systematically and consistently address the environmental and social commitments associated with the business. Sustainability has become a strategic pillar for organizations and therefore requires more comprehensive and far-reaching management.  

According to the World Bank, more than half of the world's GDP is generated in sectors that rely heavily on the services provided by the environment. However, the integrity and functionality of these natural assets are increasingly compromised, as 60% to 70% of the world's ecosystems are being degraded more than they can recover.   

For the market to function effectively, it is essential that economic agents have clear, objective and non-discriminatory rules. In this scenario, complying with the standard is not a simple task and requires that the information disclosed by the different bodies be consistent and aligned with the same objectives.