In recent years, the term environmental, social and corporate governance has attracted attention and demanded investment from companies as a new way of seeing the presence of companies in society. Gone are the days when the result they sought had to be just profit, as advocated by Milton Friedman in the 1970s. Of course, profit continues to be of vital importance for companies, but the consumer has changed and has, each increasingly demanding corporate actions that also aim to gain for society.

Part of this change in consumer vision may have to do with the sharp increase in income inequality in developed countries since the 1980s. In more serious moments, such as the 2008 financial crisis, the distance between companies' earnings and the income of People became even more vocal and movements, like Occupy Wall Street, made headlines.

This required an effort on the part of companies to improve the S (social) part of their relationship with employees.

Several business scandals, such as Enron in 2001, the Horizonte oil spill in deep waters in 2010, fraud in pollutant emission tests at Volkswagen in 2015, and the Facebook information privacy scandal in 2018, have also generated discussion about the aspect of G (governance) in companies. In a way, S and G are quite intertwined. Part of the explanations for the worsening of income inequality in recent years has to do with a certain concentration of economic and political power among American companies, which has caused wages there to remain under downward pressure. In this sense, it is worth reading Thomas Philippon's book, The Great Reversal: How America Gave Up on the Free Market.

Improving governance involves continuing to increase profits, but improving soft power of the company, the image it has in society, at the same time, and this involves improving the quality of life of its employees, in addition to being seen by society as a company worthy of the consumer purchasing its products. This idea of the impact of soft power of the company became very clear last year in Russia's invasion of Ukraine. Several companies left the latter country out of fear of contaminating their image by remaining in an aggressor country. In other times of governance, with less concern for image and society, this would be unthinkable.

However, the discussion went beyond social and governance and advanced to the environmental, E of Environmental. Climate change clearly has an impact on companies' decisions to become Net Zero in carbon emissions, which has been a constant in the quarterly reports presented by publicly traded companies. Consumers, too, have expanded this vision and demanded the purchase of products from companies that are environmentally responsible. Young Chinese people, for example, in recent surveys, demonstrate an increasingly greater degree of commitment to purchasing products that have environmentally friendly origins.

It is interesting to note that these environmental, social and corporate governance criteria are important from the companies' point of view, but it is equally relevant to think about the role of countries and sectors according to these criteria. In the same way that we think about metrics that can evaluate the quality of these three indicators in a company, it will increasingly be relevant to think about this, too, from the point of view of attracting investments that a country can make if it, too, has a public policy aimed at meeting these three criteria, as well as specific sectors in these countries, such as Brazilian agriculture.

So, how can we imagine a company that tries to follow the three criteria as best as possible in a country that does not respect this agenda in the slightest? And see that this movement does not only start from a change in perception by companies, but also by consumers. But, if the environmental conditions and regulations of a country are not adequate to meet the demands of this new consumer, how can we produce adequately in that country?

To this end, Lourdes Sola and I presented an article at the last International Congress of Political Science, in Buenos Aires, in July, with the aim of creating a classification of environmental, social and corporate governance of countries. The idea was to observe how each country has dealt with these issues and how this can become an attractor of foreign direct investment. In other words, the thesis is that countries that have social, governance and environmental responsibility can become important investment attractors.

In fact, we made a very simple econometric estimate to estimate the impact of the environmental, social and corporate governance classification of countries, with foreign direct investment data, and identified a very high elasticity of 2.3. In other words, for every 1% increase in the environmental, social and corporate governance classification, foreign direct investment would increase by 2.3%, which shows the potential for attracting resources that countries could have if they followed these metrics. Here, it is worth the idea of countries starting to work on their external image as having good indexes, in each of these criteria, to start being used by countries as an object of investment decisions.

Unfortunately, Brazil finds itself in a disadvantaged position in the ranking. Among 150 countries analyzed, Brazil is in 104th place, with our best position being the environmental metric. As expected, the three Scandinavians, Denmark, Finland and Sweden are in the top three positions, respectively.

Even though the environmental issue has become rightly unavoidable, the idea that countries need to have good governance and social management of their populations is essential for them to have good environmental practices and be able to attract quality investments. Agribusiness has a relevant role in this sense, because it encompasses the three criteria in a particularly important way in Brazil.

From a governance point of view, companies in the sector are recognized for the quality of their management, especially because, as they are heavily exposed to exports, this requires that governance has international parity and not just local parity. Mato Grosso, for example, is responsible for a third of the Brazilian trade balance and this creates a sense of responsibility in having to maintain high-level governance.

From a social point of view, we are increasingly seeing the local impact that the sector has brought to the regions in which it is located. The Midwest, for example, has become an important hub for economic growth. Since 1986, for example, Mato Grosso has seen its Gross Domestic Product grow 782%, while Brazil's average was just 121%.

Furthermore, social indicators in the region have grown strongly and it is likely that, at the end of the decade, the region's income inequality will become lower than that of the South region, historically the region with the best income distribution in the country. Finally, on the environmental issue, we all know that the sector follows the rules, and that the culprits for the deforestation that affects climate change are the vast majority of illegal mining and logging operations.

Brazilian agriculture is a microcosm of good environmental, social and corporate governance practices, which should be spread as a model for the rest of the country, as they generate business quality, good social indicators and environmental responsibility. Agriculture has transformed into what the whole of Brazil has not yet managed to transform into.