Sustainability and the journey to a more responsible future

“We must understand that sustainability can generate debates, but that beyond individual ideas (to each his or her own) it is an unstoppable conceptual transformation”.

In a rapidly changing world, the concept of sustainability has emerged as a guiding principle for businesses and individuals alike. It encompasses the delicate balance between meeting present needs and preserving resources for future generations. To delve into this transformative topic, we had the privilege of conversing with Fernando Hernández García, an ESG Financial Consultant at Insignium Group. With a wealth of expertise, Fernando shared his profound insights on sustainability and the significant impact it can have on the financial and business landscape.

For Hernández, sustainability is more than a buzzword; it's a holistic approach to conducting activities efficiently, both for the company and its surrounding environment. He believes that embracing sustainability involves internalizing externalities, and restructuring production and service processes to be more energy-efficient and circular, all while prioritizing the social aspect that engages customers and employees as the driving force. He emphasizes that sustainability and growth are not mutually exclusive; instead, they can work together to foster a thriving future.

When asked about the greatest opportunity in sustainability in the coming years, Fernando emphasizes that it goes beyond ideological debates; it represents an unstoppable conceptual transformation. Drawing a parallel to the past, he envisions a world where investing in horse-drawn carriages during the pre-combustion engine era would have been a disastrous mistake. Similarly, ignoring sustainability today would lead to missed opportunities. As a thought leader, Hernández's role is not to persuade but to enlighten, offering insights to help businesses adapt and seize opportunities in industry, services, and finance.

The path to sustainability is not without challenges, particularly in the face of rapid technological changes. Fernando acknowledges that embracing sustainability in finance can be daunting, especially when it involves understanding emissions, circularity, and workforce dynamics. However, he overcomes these challenges by presenting concrete examples and posing thought-provoking questions. For instance, if someone informed you that petroleum wouldn't be the primary energy source in 15 years, would you ignore such a critical fact? By addressing concerns head-on, he helps others embrace sustainability.

Reflecting on his experiences, he finds pride in contributing to the transformation of internal processes in finance. He sees immense value in generating policies that integrate sustainability into day-to-day operations and embracing technological innovations to drive efficiency and energy transformation. As a financier, he takes joy in being a part of the change, shaping the role of the actor that funds positive transformations.

The future of sustainable practices holds great promise, with numerous emerging trends expected to reshape business operations. From small businesses adopting solar panels for energy efficiency to companies achieving circularity by converting waste into energy, the changes will be profound. Additionally, he highlights the exciting trend of innovative food solutions that prioritize both health and productivity. These shifts will revolutionize various industries and encourage a more sustainable world.

Emphasizing the role of technology, Hernández recognizes it as a key enabler in driving sustainable solutions. The significant advancements in renewable energies owe much to technological breakthroughs. Moreover, artificial intelligence holds the potential to exponentially increase sustainable solutions across various domains, redefining production and consumption practices.

Fernando sees immense potential in transitioning towards a circular economy and adopting regenerative practices. Not only have investments in circularity yielded spectacular returns, but companies that prioritize circular practices also improve overall efficiency, thus making a positive impact on the bottom line.

Transparency and accountability play crucial roles in sustainability, and he emphasizes the importance of reporting and disclosing ESG data. He firmly believes that "what is not disclosed doesn't exist." He advocates for aligning reporting and disclosure with transformational journeys rather than treating them as mere compliance tasks to avoid "greenwashing" practices.

Prioritizing ESG and sustainability offers substantial benefits to companies in terms of financial performance and reputation. Hernández believes that these benefits are currently significant, and in the near future, they will become basic necessities for any business. While the journey may require investment and effort, he is confident that it will be rewarded.

True sustainability requires more than just empty promises. Fernando advises companies to start with the basics, understand their materiality, and then strive for excellence. By focusing on what truly matters, businesses can avoid greenwashing and genuinely contribute to sustainability.

Innovative approaches can demonstrate a company's social responsibility and positive impact on communities. He advocates for quantifying positive and negative impacts to provide clear evidence of a company's contributions. Initiatives like Impact Weighted Accounts (IWA) are gaining traction and help showcase the real value a company brings to society.

Implementing legislation that promotes ESG practices can be a challenging task, particularly in the financial sector. To overcome these challenges, Hernández believes in educating stakeholders continuously and ensuring that sustainability remains at the forefront of the business agenda. While it may be complex, he emphasizes that sustainability itself is not up for debate; the discussion revolves around finding the most effective ways to achieve it.

An effective sustainability report should be concise, data-driven, and focused on objectives and transformational processes. Fernando's expertise in SASB and IFRS standards highlights the importance of offering information efficiently. Transparency is key, and elaborate reports won't suffice if they fail to communicate essential information.

Sustainable investments have a pivotal role in shaping a positive impact on the environment and society. While institutional investors may drive change, the ultimate transformation will be driven by individual investors. However, the lack of accessible and comprehensive sustainability information often delays this process. Educating investors and breaking down complexity is crucial to expedite positive changes.

Hernández envisions the power of consumers as the driving force behind emerging trends in sustainability. From the surging demand for electric vehicles to shifts in consumer preferences, these trends hold the potential to create significant change and shape a sustainable future.

In conclusion, sustainability is a journey with both challenges and opportunities. Time is of the essence, and it's essential to embrace sustainability across all aspects of life. As Fernando eloquently put it, "It is not a political or ethical issue; it is a way of producing, consuming, and relating more efficiently and harmoniously." Embracing sustainability is not just a choice; it's the path to a brighter and more responsible future for all of humanity.