ESG aspects in Brazil

published on 25 July 2023 | Reading time approx. 2 minutes

ESG has become an increasingly relevant approach on the global business stage, driving companies to prioritize sustainable practices, social responsibility, and strong governance structures. By integrating ESG factors into their strategies, companies can create long-term value, mitigate risks, and contribute to a more sustainable and inclusive world. Below, we highlight three initiatives designed to strengthen ESG activities in Brazil.

1. MADE IN BRAZIL | Brazilian ESG Benchmarks

Rödl & Partner, together with clients as well as strong partners – such as the renowned Ayrton Senna Institute – is co-producer of an ESG television program with the name “Made in Brazil”, which will be broadcast on TV Cultura. According to studies conducted by BBC and the British Populus Institute, TV Cultura is the second best quality television in the world after BBC One. Brazil's first English-language program (with Portuguese subtitles) will be broadcast to approximately 150 million people in Brazil and will be distributed internationally through all social media channels.

ESG has become the “game changer” of the global business world, and “Made in Brazil” has a mission to showcase Brazil's leadership in the ESG era. Numerous high-level delegation visits from Europe show that Europe sees Brazil as a key strategic partner in the ESG era.

The program will highlight innovative “Made in Brazil” best practices from companies as well as institutions and raise awareness of their commitment to environmental protection, social well-being and ethical corporate governance across the region.

2. The German Supply Chain Law impacts on companies in Brazil

The new Supply Chain Law (LkSG for short) imposes far-reaching new human rights obligations on companies along the supply chain. The LkSG has been in force since January 1, 2023.

However, the new law not only creates an urgent need for action for the obligated companies. Small and medium-sized enterprises must also comply with the requirements of the LkSG, even if only indirectly: SMEs are bound by the due diligence requirements as potential suppliers or business partners of directly affected companies, since the companies mainly affected must audit their entire supply chain (and that includes suppliers). In the future, special attention will be paid in Brazil to suppliers from particularly affected sectors such as food, textiles and agriculture, which is why local Brazilian suppliers in particular should also address the requirements of the law in order to secure their future business relationships with large German companies.

3. Program to promote more jobs for women “CONTRATA + MULHERES”

The new law provides for more flexible working hours for mothers and fathers who have children under 6 years old or with disabilities. It also establishes that women receive the same wages as men who perform the same function in the company and provides for the promotion of small loans for women. It also raises the maximum age of eligibility for childcare to 5 years and 11 months, strengthens the qualification system for women who are victims of domestic violence, and creates measures to combat sexual harassment.

In addition, the qualification of women in strategic areas is promoted through the suspension of the employment contract for the purpose of professional qualification and the encouragement of women to fill vacancies in qualification courses.

Whistleblowing: The commitment to establish a complaints office to prevent and combat sexual harassment and other forms of violence in the workplace through an internal Commission for the Prevention of Accidents and Harassment (CIPA) should be highlighted.