Latin Trade IndexAmericas Sustainability Award.

Author:Gutierrez, Santiago

Sustainability is not an idealistic goal. Rather, it is increasingly a necessity for business. That's why, starting this year, Latin Trade will recognize the companies in Latin America that are the most outstanding in sustainability.

Sustainability is a critical issue for the 21st century. Businesses have to prosper and grow as much as they can so they can meet clients' needs without eroding the social and physical environment. That is what countries are increasingly asking for, and it cannot be otherwise.

The numbers show that sustainability isn't an idealistic proposition. More and more, it is a necessity for all businesses. For example, an article published in 2015 in the Journal of Sustainable Finance brought together the data and results of 2,000 studies and showed that companies that are strong in social, environmental, and corporate governance issues (ESG) have better financial and operational performance, and when they are listed on a stock exchange, a higher market valuation.

The Boston Consulting Group report that Jorge Becerra presents in his column (Pg. 42) shows that the best companies in ESG from four sectors - packaged consumer goods, biopharmaceutical products, oil and gas, and banking - obtained multiples of valuation between 3% and 19% higher than the average for their sectors.

Social conditions also require sustainability. Lourdes Casanova, in her column (Pg. 22), shows how the growth of poverty and the widespread prevalence of corruption threaten Latin America's future. "It is urgent that business management become part of the solution to the region's social problems."

The Inter-American Development Bank (IDB) has championed promotion of...

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