Evolution and Challenges of Environmental, Social, and Governance Practices: An Analysis of the Brazilian Stock Exchange’s Corporate Sustainability Index

Maria Aparecida Hess Loures Paranhos, Irenilza de Alencar Nääs () and Pedro Luiz de Oliveira Costa Neto
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Maria Aparecida Hess Loures Paranhos: Graduate Program in Production Engineering, Paulista University, R. Dr. Bacelar 1212, São Paulo 04026-002, SP, Brazil
Irenilza de Alencar Nääs: Graduate Program in Production Engineering, Paulista University, R. Dr. Bacelar 1212, São Paulo 04026-002, SP, Brazil
Pedro Luiz de Oliveira Costa Neto: Graduate Program in Production Engineering, Paulista University, R. Dr. Bacelar 1212, São Paulo 04026-002, SP, Brazil

Sustainability, 2024, vol. 16, issue 15, 1-12

Abstract: Environmental, social, and governance (ESG) practices are increasingly recognized as critical for corporate sustainability and market competitiveness, driven by heightened expectations from investors, governments, and consumers. This study examines the evolution of ESG practices among companies listed on the Brazilian Stock Exchange’s Corporate Sustainability Index (ISE B3) from 2005 to 2022. We analyzed the index portfolio’s composition, focusing on changes in ESG dimensions over time. The only six long-lived companies in this index, from retail, banking, and energy sectors, were selected for in-depth analysis. We further evaluated the quality and consistency of ESG disclosures in company reports. Findings indicate relevant fluctuations in the number of companies included in the ISE B3 and variations in ESG scores for the companies. These variations may be attributed to the voluntary nature of ESG practices and the absence of standard disclosure. This study reveals a lack of homogeneity in ESG reporting, which could be addressed by establishing more straightforward guidelines and global standards. This research underscores Brazilian companies’ challenges navigating diverse ESG frameworks to align with evolving societal and environmental expectations.

Keywords: capital market; corporate sustainability index; global standard; sustainable development goals (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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