M-Risk Blog 

In today's complex business landscape, an increasing number of organizations recognize the importance of Environmental, Social, and Governance (ESG) factors in their operations.

ESG reports have emerged as an essential tool for measuring and communicating sustainability practices and performance, serving as a means of conveying transparency and accountability to all stakeholders, including investors, customers, employees, regulators, and communities.

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.   

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.   

Corporate Governance is understood as the set of rules, principles, policies, and procedures that regulate and define the structure and operation of a company's governing bodies. It establishes and regulates the relationships between shareholders, the board of directors, the management team, and stakeholders, regulating the decision-making process for long-term value generation.

Environmental monitoring is defined as the measurement and evaluation of physical, chemical, and biological indicators of an identified environment for a determined period of time, with the purpose of measuring the changes that can be generated in the environment.

ESG practices have taken a predominant role in the business world and have become a requirement for companies. More and more investors are looking to allocate their money in organizations that are aligned with good practices in the environmental, social and corporate governance fields. With this new trend, avoiding simulating compliance with ESG criteria is one of the major challenges facing the market. This practice, known as greenwashing, is the attempt by an organization to make its products or services, and itself, appear sustainable when in fact they are not.

Social concern for sustainable economic development has led investors to require more ESG information to determine where their interests will be best protected. The regulations, for their part, have not been left behind and have adapted to this new panorama. It is in this context that the Chilean Financial Market Commission (CMF) published the General Standard 461, which incorporates sustainability and corporate governance issues in the organizations' Annual Report.