ESG Criteria for Colombia in 2024

Entering the Colombian market presents various opportunities and challenges for companies seeking to establish their presence in this country. One of the critical factors that companies must consider is compliance with environmental, social and governance (ESG) criteria. Colombia has an economy that is constantly developing around various areas such as ESG, so understanding these criteria is crucial for any company seeking to operate successfully and sustainably within this country.

Environmental Criteria

Colombia has stringent environmental regulations that companies must adhere to, including laws related to waste management, pollution control, and natural resource conservation.

Regarding waste management Colombia enforces Law 1259 of 2008, which sets norms for the disposal and management of solid waste, and Decree 2981 of 2013, regulating the comprehensive management of waste, including collection and disposal. Resolution 1407 of 2018 establishes the extended producer responsibility (EPR) scheme, ensuring producers manage the entire lifecycle of their products. 

Key regulations for pollution control include Law 99 of 1993, which creates the framework for environmental management and the Ministry of Environment, Decree 1076 of 2015, consolidating environmental regulations, and Resolution 909 of 2008, setting permissible limits for industrial air emissions to control pollution.

Concerning the conservation of natural resources, Colombia has enacted several laws for the conservation of resources, such as Law 165 of 1994, which ratifies the Convention on Biological Diversity, Decree 2811 of 1974, which establishes the National Code of Natural Resources Renewables, and Law 1930 of 2018, which provides protection to high-altitude wetlands (paramos), crucial for the regulation of water and biodiversity.

Furthermore, it is also possible to find a country emphasis on adopting sustainable business practices, such as reducing carbon footprint, utilizing renewable energy sources, and promoting biodiversity. Added to this are mandatory environmental impact assessments and periodic reports to demonstrate compliance with national and international standards.

It should be noted that Colombia is the first country in Latin America to set forth a green taxonomy within its legal framework, as detailed in Circular 005 of 2022, which provides guidelines for environmentally friendly investments and markets.

Social Criteria

Compliance with Colombian labor laws is essential for companies operating in the country. These laws ensure fair wages, safe working conditions, and the right to unionize, thereby protecting employees from exploitation and unfair labor practices. Companies must be vigilant in adhering to these regulations to maintain a positive and lawful work environment.

Also, active engagement with local communities is another critical aspect of social criteria. Companies are encouraged to foster good relationships with stakeholders and contribute to social development initiatives. This engagement not only helps in building trust but also enhances the company’s reputation and supports community growth and well-being.

Finally, implementing policies that promote diversity and inclusion within the workplace is crucial. Colombian law, as outlined in Law 2294 of 2023, mandates that at least 30% of the boards of directors of listed companies and financial entities with majority state ownership must be composed of women. These efforts towards gender equality and inclusive practices ensure equal opportunities for all employees, fostering a more equitable and productive work environment.

Governance Criteria

Transparency and accountability are paramount in Colombia's corporate governance landscape. Companies must maintain high standards of transparency through detailed and regular reporting. This ensures that stakeholders are well informed about the company's operations and governance practices.

Supporting the aforementioned is Decree 151 of 2021 which requires issuers to provide detailed ESG performance data in their quarterly and annual reports. This includes compliance with international standards such as those established by the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB). This comprehensive disclosure ensures that companies remain accountable and transparent to their stakeholders.

In addition, adhering to anti-corruption measures is crucial. Colombian regulations require strong anti-corruption frameworks to prevent bribery and corrupt practices. Companies must implement strict internal controls and ethical guidelines, such as regular audits, whistleblower protection programs, and comprehensive anti-bribery policies.

Additionally, employee training programs on ethical behavior and compliance with legal regulations are essential to ensure compliance with these guidelines. In other words, companies are expected to foster a culture of ethics, ensuring that all operations align with legal standards and ethical principles.

Why Choose Ongresso for ESG Sustainability Consulting?

Ongresso stands out as an exceptional partner for ESG sustainability consulting as it offers a combination of deep experience and personalized guidance to help companies thrive in the Colombian market. In Ongresso you can find:

1. Tailored ESG Solutions: Ongresso consultants provide customized ESG strategies that align with regional needs, ensuring sustainable growth and compliance with local regulations.
   
   
2. Regulatory compliance and risk mitigation: Ongresso's experience ensures that companies can avoid potential obstacles and operate smoothly within the legal framework.
   
   
3. Comprehensive ESG Reporting: Ongresso ensures companies meet strict reporting standards, such as those set by the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB).
   
   
4. Experience in Green Taxonomy: Ongresso's knowledge of these guidelines, such as those outlined in Circular 005 of 2022, positions it as a leader in advising companies on environmentally friendly investments.