ESG and the Momentum for the 2030 Agenda and the Paris Agreement

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Although it has become increasingly evident that today’s actions determine tomorrow’s quality of life, efforts both toward decarbonization and toward a more prosperous economy, a fairer society, and a preserved environment remain insufficient.

As we approach a decade since the signing of the Paris Climate Agreement and the 2030 Global Agenda for the 17 Sustainable Development Goals (SDGs), it is clear that much work still lies ahead.

The 2030 Agenda and the Paris Agreement, outcomes of extensive international negotiations involving governments, civil society, and the private sector, succeeded other international accords, such as the landmark Agenda 21 (ECO-92) held in Rio de Janeiro, which left a lasting impact on international policy.

Despite their undeniable importance, these commitments continue to bear the features of soft law, where legal effects are not necessarily binding. This is a common characteristic of international agreements in the fields of climate, social policy, or human rights, where compliance depends largely on political and economic pressure.

Both initiatives from 2015 underscore the need for collective action by society to address current global challenges. In the context of the Paris Agreement, the critical scenario is evident in recent UN reports, which warn that the existing climate commitments of signatory countries would result in only a 2% reduction in greenhouse gas emissions by 2030.1.

This stands in stark contrast to the climate emergency declared in 2019 by the European Parliament and other nations, a situation that has fueled mounting pressure for concrete action against global warming. Climate policies and targets have thus become the subject of broad and systematic scrutiny, including before Constitutional Courts, with climate litigation on the rise in Brazil and around the world.

This reality highlights the profound difficulties—often compounded by denialism—that governments face in implementing international obligations, a challenge exacerbated by the post-pandemic context and the complex present-day geopolitical landscape. These conditions weaken the space for building political and legal consensus.

The fact is that we are now in the “decade of action and ambition” leading up to 2030, a period in which the urgent, swift, and broad implementation of climate targets is imperative. Success does not depend solely on the public sector but also—indeed, especially—on the active participation of the private sector and society at large.

Another critical mission involves the 169 targets and 17 Sustainable Development Goals (SDGs) of the 2030 Agenda, which are obligations shared by public and private actors alike. In its 2023 report, the UN acknowledged that there have been positive results in several of the 17 SDGs, while cautioning that far greater synergy and effective action between public and private sectors are still required to advance the sustainable development agenda.2.

This raises questions such as: What could drive the “big push” needed to achieve the climate targets and the 17 SDGs established in 2015? Considering that even signatory countries have not significantly advanced on those commitments, how might businesses and the private sector be more effectively integrated into this collective effort?

When seeking answers, the ESG (Environmental, Social, and Governance) agenda inevitably comes to the fore. ESG reflects the (r)evolution of management and corporate governance standards and has sparked a genuine race within the business and financial sectors—both in Brazil and globally—toward a new economic paradigm, described by many as “Stakeholder Capitalism.”

History shows that private sector participation in international sustainability initiatives has long been emphasized in multilateral development forums. Since the 1950s, corporate social responsibility has been a recurring theme, and by the 1970s, countries were already discussing the supposed dichotomy between private profit and the public cost of unchecked exploitation of natural resources.

Yet, for decades, such pressure—often driven by civil society—was mistakenly perceived by the private sector as an obstacle to growth. The matter was treated as peripheral, considered only tangentially to the “core business,” and incorporated only superficially into market regulation and corporate governance practices.

Today, however, there are clear indications that significant contributions are increasingly expected of the private sector, particularly through ESG-oriented management and governance practices. In recent years, this movement has triggered profound changes in corporate management structures, reinforced by signals from markets, regulators, consumers, and society at large.

This means that the private sector—albeit belatedly—is now moving into new territory, where companies must adapt to stricter national and international standards in environmental, climate, social, human rights, and governance matters. It is precisely here that the ESG agenda demonstrates its potential to contribute to achieving the goals of the Paris Agreement and the 17 Sustainable Development Goals of the 2030 Agenda.

This trend is increasingly a matter of corporate survival: companies and businesses that fail to adapt to new ESG requirements will likely face negative consequences from markets, clients, consumers, and regulatory agencies—not to mention the broader repercussions for the planet and the climate itself.

This is evidenced by the growing demand for ESG experts, who remain scarce in Brazil3. In addition, law firms in Brazil and abroad are assembling multidisciplinary teams to support companies, offering not only regulatory risk assessments but also the implementation of governance, management, and compliance systems addressing ESG matters and the external impacts of organizations and their operations.

In this regard, it will be essential to prioritize strategies that ensure economic sectors and financial markets take climate change and the 17 SDGs into account in their activities and projects. Indeed, some governments and companies already assess climate and ESG-related risks as project selection criteria—standards that are fast becoming prerequisites for access to credit, markets, and clients in Brazil and worldwide.

At this juncture, two important conclusions emerge:

1. The private sector will most likely be compelled to engage in climate and sustainability issues in its operations—a long-standing goal that has historically been insufficiently implemented or required under international commitments; and

2. The ESG agenda provides clear direction for governments and markets to advance the regulation of sound corporate practices in fulfilling the Paris Agreement and the 17 SDGs of the Global 2030 Agenda, much as was seen in the rise of corporate governance and compliance over the past two decades.

In terms of driving forward the Paris Agreement and the Global 2030 Agenda, there is no viable alternative other than joint action between the public and private sectors—an arena in which the ESG agenda is a crucial ally.

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Adapted from the original article, published on June 17, 2021, in Revista Consultor Jurídico (ConJur). Also published on LinkedIn.

Authors: Bruno Teixeira Peixoto and Camila Kososki Lucchese