ESG practices by utilities companies

Brazil has one of the largest utility sectors in the Americas creating a need for strong ESG practices.  In 2013, ten Brazilian signatories, representing nearly US$1 trillion in assets under management, started a collaboration to engage with eleven companies from the electric energy sector. The main objective was to raise awareness and encourage the adoption of better ESG practices. In particular, this project hoped to understand the environmental implications arising from the use and disposal of products and services, the financial cost of climate change, community relations surrounding the companies’ operations, health and safety of workers and the general public, the commercial losses from energy efficiency, and finally, issues surrounding exposure to bribery and corruption in the sector.

Investors met with target companies to discuss the risk mitigation strategies which many companies already had in place. The engagement therefore focused on the disclosure of this information to investors.