Esg criteria

Corporate values are measured in the governance game

The concept deserves to be recovered in its broadest and highest sense: as social responsibility inside and outside the organisation

15 May 2025

3' min read

Forgotten governance. In the era of ESG companies, the 'e' of environment takes centre stage. The 's' of ssocial lends itself well to sustainability reports and advertising campaigns. And the 'g'? Too often confined to a technical level and entrusted to the legal departments of companies.

Yet it is there, in the management dimension, that the deepest coherence of a company with the values it claims is measured.

When we speak of governance - a term which, significantly, we do not translate into Italian - our thoughts immediately turn to internal administration: organisation charts, employee relations, inclusion, codes of ethics, compliance systems. The ESG policies of the main institutional operators and listed groups confirm this approach, limiting attention almost exclusively to endosocietal aspects.

But an authentic vision of corporate governance cannot stop at the comfort zone of internal procedures.

The game of governance, in fact, is played above all in the behaviour of a company towards the outside world: in the ethics of business practices, in the fairness of contractual relations, in the substantial - not just formal - respect for customers, suppliers, competitors and stakeholders. It is here that one sees whether the declared principles are concretely reflected in contracts, negotiations, operational practices and daily choices in the market.

An emblematic example comes from the real estate sector, where contractual practice, especially of Anglo-Saxon origin, often presents, even in wording, marked asymmetries between the parties. Contracts are designed to protect the strong party by means of captious clauses or imbalances that are difficult to overcome.

All perfectly legal, of course. Freedom of contract and the pursuit of profit are pillars of the free market and cannot be questioned. However, between the maximisation of profit and the abuse of one's economic strength there is a thin, but crucial, line: ethics.

In spite of this, many companies boast the 'g' in their sustainability reports and on institutional websites, displaying sophisticated internal procedures for appointing top management bodies or managing risks. In some cases, even the fight against corruption is presented as an emblem of good governance, as if mere compliance with the law were an indicator of good management.

It must then be remembered that adherence to the ESG criteria is voluntary and presupposes an effort that goes beyond mere compliance with the law.

Being ESG 'likes' and 'makes an image', but it cannot be reduced to a marketing strategy, emptied of its original intent.

Those who freely choose to adopt ESG criteria are committed to pursuing higher standards of responsibility and sustainability. Therefore, limiting oneself to internal compliance betrays the very spirit of EGS: building trust, ensuring fairness, promoting sustainable and fairer economic behaviour.

The concept of governance deserves, therefore, to be recovered in its broadest and highest sense: as the social responsibility of a company, inside and outside the organisation.

The OECD Principles on Corporate Governance (2023) clearly underline this: effective governance requires not only adequate internal structures, but also adherence to ethical standards in market practices, the promotion of fair competition, and the protection of the interests of external stakeholders.

Similarly, the UN Guidelines on Business and Human Rights reiterate the obligation for companies to integrate respect for fundamental rights in all their activities, including contractual ones.

Some practical solutions could fill this gap. First of all, provide for the incorporation in the codes of conduct of Esg-oriented companies, the principle of fairness and correctness in negotiations and contracts as well as respect for counterparts. It is not enough to recall ethics: one must also live it in one's daily modus operandi.

It goes without saying that fair contractual models should be adopted, avoiding aggressive negotiations and abuses of economic and contractual positions, which are often 'gratuitous' and cause unfair and avoidable harm to the other party.

Another practical solution could be an ESG assessment of suppliers and counterparties not only in environmental (e) or social (s) terms, but also in terms of transparency, ethics and contractual fairness (g). It would also be important to implement in-house training to develop a culture of contractual fairness and ethics.

Lastly, transparent communication to the outside world should be adopted, including in the ESG reports not only internal governance aspects, but also the principles guiding the management of business relations and corporate behaviour in civil society.

The 'g' in Esg cannot therefore be reduced to a mere formal label. Governance means, in a certain sense, rediscovering the value of that 'gentleman's agreement' that modernity seems to have forgotten and that used to be sealed right from the handshake. It is not enough to write rules: we must live them, every day, in every business relationship. Only then can sustainability be authentic and credible.