As Governor in Brazil warns of ‘biggest climate disaster’ to come, ESG startups pave way for sustainable digital transformation

By May 6, 2024

Brazil has lost 20% of its rainforest to deforestation, making the country one of world’s largest contributors to greenhouse gases and global climate change. Organizations across the globe, including the Nature Conservancy, are working hard to change that.

The necessity and urgency of these efforts was put center-stage this week, with heavy rains devastating Rio Grande do Sul, the southernmost state of Brazil.

The downfall has already left 75 people dead and more than 88,000 homeless.

Torrential downpour affecting more than 731,000 people

In total, approximately 2 out of every 3 of the cities in the southern Brazilian state recorded issues resulting from the rains, including the state’s capital Porto Alegre, one of the largest cities in the country.

According to meteorologist Marcelo Seluchi, the rains are the result of a number of factors including a heat wave in the country that led to the formation of dry and hot air, which then blocked the passage of cold fronts to the north of the country.

Said Seluchi, “These cold fronts come from Argentina, they quickly arrive in the south of Brazil and are unable to advance. We have a succession of cold fronts that have become stationary and are maintaining the rain for several days in the state.”

The meteorologist did not rule out that the rains were impacted by climate change.

Individuals across Brazil, in addition to the international community, are considering what preventative actions can be taken for the future.

What are tech companies doing about ESG 

For a number of years, a new era of startups have been working to address many of these environmental-related challenges.

One of these, San Francisco-based Credibl, is on a mission to improve upon the adoption of environmental, social, and governance (ESG) for companies across the globe.

The company offers an intelligent, end-to-end platform to track and measure against ESG metrics, in addition to offering features like an ESG virtual assistant, automatic peer benchmarking and variance analysis that spots manual mistakes.

Its platform stands out for its ability to provide real-time, actionable insights that enable businesses to navigate the industry’s complexities.

The tech startup was co-founded in 2018 by Silicon Valley based entrepreneurs Jitesh Shetty, Sushil Choudhari, Parth Patil, and Ravi Agarwal. 

All of these tools promise to make it easier for companies to monitor their performance to see if they’re making progress towards ESG goals and identify areas that need adjustment. In turn, with transparent, accurate reports to hand, companies can build trust and authenticity with investors, stakeholders and clients. 

Since last year, public companies in Brazil have been required to provide annual sustainability and climate-related disclosures, starting in 2026, according to the country’s Securities and Exchange Commission (CVM) and Ministry of Finance.

Said Brazil’s Minister of Finance Fernando Haddad at the time, “This will generate a virtuous cycle of greater transparency and commitment, allowing the possibility of measuring the issue, because there needs to be a global institutional metric, so that the market is global.”

Disclosure: This article mentions a client of an Espacio portfolio company.