Between 2016 and 2020, according to the “Global Sustainable Investment Alliance”, the total volume of investment in companies integrating the ESG (environment, social and governance) criteria into their respective financial analysis surged by 143% worldwide. Recently, the European Commission carried out the first emission of green bonds and thereby raising 12 billion euros to be applied exclusively to green and sustainable investment projects throughout the EU. These figures are both impressive and illustrate the importance acquired by ESG over the last decade and shall foreseeably continue to grow over the years to come. We are thus not dealing with a future trend but rather in the presence of a reality which is increasingly inevitable. One of the main current challenges stems from how these companies adopt these criteria without undermining their creativity and competitiveness that enables their potential.

The priority attributed to the climate transition by the European Mechanism for Recovery and Resilience, and correspondingly including the national plan, as well as the United Nations report from the inter-governmental panel on climate change are clear signs of the path that will have be taken by the productive sector based on promoting more sustainable business models, operations and chains of supply and another level of interaction with the stakeholders interested in their activities (employees, consumers and civil society), which extends beyond the universe of company shareholders. This is the moment for organisations that have not yet done so to grasp that change is taking place and it is hard to conceive of any U-turn in such a direction.

New development strategies, such as those embodied at the European level by the “Green Deal”, imply new challenges and organisations will have to be capable of adapting and completing the necessary structural transformations to deal with them successfully. Any company that seeks to continue being innovative and competitive in increasingly global markets will have to undertake this reflection and move onto actions in the short term.

Despite the rising concerns of younger generations over climate change, there is the risk of being left halfway in a transformation process based on the decarbonisation of economies; oscillating between the unreal demands of political power and the attempt to engage in “greenwashing” by companies, on the one hand, and the growing generational and geographic cleavages on the other hand. Hence, should such prevail, nobody will emerge as a winner from this collective effort and the greatest losses shall fall on those who are most vulnerable whether in social, age or climate terms.

The answer to the question “where are we going?” on the subject of ESG may appear a complex exercise in futurology but this depends above all on the circumstances and adaptive capacities of each economy: the weaknesses and rigidities in the Portuguese case are well-known. Despite the growing openness and interest of the national business class in this theme and the adoption of the respective short and medium term strategies – for which success competes alongside the digital transformation ongoing in parallel and that has accelerated due to the pandemic – this requires a serious effort to adapt that shall not be without pain.

With all the responsibility of being the first Portuguese legal firm to publish a Sustainability Report in keeping with the “Global Reporting Initiative” directives, publishing accounts and measuring the carbon footprint, Abreu Advogados is committed to a set of voluntary national and international initiatives designed to bring about a more balanced business universe, including the United Nations Global Compact, the BCSD – the Business Council for Sustainable Development, and holding the international B Corporation certificate. We also seek to contribute by setting the example that the undelayable ESG, more than just inevitable, constitutes a true opportunity for all of those who we work with.