ESG criteria: when playing fair pays off

ESG polices make an increasingly important contribution to the corporate strategy of all companies, and failing to adopt them is a bad option at all levels, as PwC's Global Private Equity Responsible Investment Survey 2021 points out: "Multiple crises over the past 18 months have delivered a stark wake-up call to the world. If we are to prevent further pandemics, reduce the risks of climate change, build a more equitable society, and still generate growth, we’ll have to create more sustainable economies and systems.”

And generating growth remains a priority objective, because adopting ESG policies depends on a successful sustainable economy, i.e. on the profitability of investments and ESG-committed companies. "Some companies," PwC  notes in its biannual report, "will lead this process and gain competitive advantages from it, while others may lag behind and see their value erode."

According to PWC, 2021 was the first year of a new expansionary phase, marking a turning point in investment and social and consumer demand. Until very recently, ESG policies were seen as complementary, taken into account for ethical and corporate responsibility considerations; but "today they are at the heart of the strategy, an obligation that is also profitable. They are at the heart of investment analysis.”

PwC's 2021 report shows that in 2019, 35% of boards said that ESG policy was discussed at their meetings more than once a year; by 2021 this figure had risen to 56%. In addition, 66% placed value creation among the top three factors of responsible investing, and 72% said they always analyze a company’s ESG profile before doing business with it. According to Bloomberg Intelligence, ESG investment was set to reach $41 trillion by 2022 and could exceed $50 trillion by 2025.

 

As explained in the UN Global Compact - the largest private initiative for sustainable development, with which Prosegur has been associated since 2022 - half of Spanish companies acknowledge that their sustainable measures already have a positive impact on their economic balance sheets, despite successive crises, from a global pandemic to inflation. "We are talking about a growing demand among employees, customers, consumers, investors and shareholders of today and tomorrow. And companies that see sustainable commitment not as a cost, but as an investment with economic benefits".

However, the Global Compact finds that there is still a significant gap between plans and quantifiable executive actions. Although 70% of Spanish companies have a code of ethics, only 39% have such basic tools as a whistle-blowing channel. And the pro-human rights policies of 26% are only completed with impact assessment in 10% of cases. Importantly, Prosegur applies these practical measures.

The International Security Ligue, the Swiss-based organization that supports and drives fair competition and legislation compliance in the global security industry, confirms that while its members are increasingly under pressure to comply with new ESG requirements, they are also spurred on by the opportunity to stand out from the competition. According to the Ligue, "public administrations [a strategic client for the sector] are under increasing pressure to partner exclusively with security providers that meet high ethical and environmental standards, guaranteeing good working conditions."

This makes sense: sustainable regulations originate in the public sector, so the administration must lead by example. Moreover, this tendency to evaluate public sector security providers can be extrapolated to private clients. This generates a chain effect: pressure from regulators, investors and customer preferences translates into security companies' demands regarding the ESG profile of their own suppliers. We are talking about a huge portion of the business fabric; Prosegur alone has more than 26,000 suppliers worldwide.

Prosegur is evolving over time in line with this trend. In 2021, the company approved its Sustainability Master Plan, which includes 63 initiatives related to ethics, transparency, governance, people, workplace health and safety, and the environment, all in line with the UN Sustainable Development Goals (SDGs).

In November 2022, the company updated its Code of Ethics and Conduct, replacing the previous version, in force since 2013,  incorporating new contents that reflect the company's current situation, and with increased relevance for ESG criteria.

This year, both the group as a whole and Prosegur Cash were the first companies in the sector worldwide to publish their ESG assessment - supervised and validated by independent entities - and enter a specialized S&P Global Ratings.

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