Cooperative Governance and ESG as Pillars for Business Sustainability

Juliana Lacerda Rangel Sossai; Eliza Remédio Alecrim

DOI: 10.22167/2675-6528-202603077

Article derived from a Final Course Work (TCC), with content based on the student’s original work and adapted to the editorial format of the E&S Magazine with the support of the ResumeAI tool, an artificial intelligence solution developed by the Pecege Institute for textual synthesis and organization.

Abstract

A study of an applied nature and qualitative approach analyzed how formal management, control, and integrity instruments, publicly disclosed, were articulated with the environmental and social agenda in a large Brazilian credit cooperative (a unique case), focusing on the measurement, transparency, and management of socio-environmental risks. For this purpose, a case study design and documentary analysis of official sources published between 2020 and 2024 were adopted. A protocol for corpus selection, construction of analytical categories, thematic coding, and evidence recording in a traceability spreadsheet was followed, treating the findings as disclosure evidence and not as an audit of effectiveness. The results revealed the presence of institutional structures, roles, and flows related to the theme, as well as initiatives and commitments reported in different documents. However, challenges were identified in conceptual standardization, temporal comparability, definition of calculation methods, ownership attribution, and data audit trails, which may limit measurement consistency. As an applied contribution, matrices of minimum indicators and data governance were consolidated, and actionable guidelines were proposed to strengthen the indicator cycle (definition-collection-validation-reporting), improve traceability, and align disclosed commitments with documentary evidence, aiming for better risk management and institutional transparency.

Keywords: Compliance; Socio-environmental risk management; Indicators; Integrity; Materiality.

1. Introduction

The growing demand for a more conscious and responsible capitalism has been redefining how organizations evaluate long-term performance and sustainability. In this movement, the measurement of results ceases to be limited to the economic-financial indicator and begins to incorporate environmental, social, and governance dimensions, reflecting the need for resilient, transparent institutions capable of managing complex and interdependent risks.

In this context, the Environmental, Social and Governance (ESG) framework has consolidated itself as a reference for identifying and managing risks and opportunities, by articulating guidelines related to natural resource management, stakeholder relations, and organizational direction, monitoring, and incentive mechanisms (IBGC, 2020).

In parallel, compliance programs constitute ethical governance instruments aimed at preventing, detecting, and responding to deviations, contributing to the reduction of legal and reputational risks and to the strengthening of institutional integrity (Candeloro et al., 2012).

Within the Brazilian context, cooperativism, defined by Law nº 5.764/1971 as a people’s society with its own legal form and nature, shows structural adherence to sustainability agendas. This is due to principles such as democratic management, economic participation, and community interest (Brasil, 1971; OCB, 2022). When operationalized through policies, processes, and indicators, the integration between cooperative governance, ESG, and compliance tends to enhance institutional resilience, transparency, and territorial value generation, in convergence with Agenda 2030 and the Sustainable Development Goals (UN, 2015; Ferraz, 2023; Silva and Vasconcelos, 2021).

Despite this conceptual alignment, gaps persist in the applied literature regarding how governance, risk management, and reporting instruments, often materialized in public documents and institutional regulations, translate into consistent practices of measurement, integrity, and socio-environmental impact generation within the context of Brazilian credit cooperatives.

Recent evidence in public documents from the analyzed credit cooperative, including reports and frameworks related to socio-environmental and climate risks and sustainable finance, suggests the existence of governance arrangements, technical criteria, and reporting processes favorable to risk and impact management, but demands systematized and contextualized analysis (Cooperativa, 2024a; Cooperativa, 2024b; Cooperativa, 2024c). Therefore, the general objective of this work is to analyze how principles of cooperativism and governance and integrity mechanisms articulate with the ESG agenda in the analyzed credit cooperative, through documentary analysis, aiming at business sustainability and strengthening governance.

2. Material and Methods

This study, of an applied nature and qualitative approach, sought to deepen the understanding of organizational phenomena and the interpretation of meanings in institutional documents (Gil, 2019). A single case study design (Yin, 2015) was adopted to examine a contemporary phenomenon in its real environment. The unit of analysis was a large Brazilian credit cooperative, selected for its theoretical relevance and the availability of a consistent public documentary series on governance, integrity, and the ESG agenda.

The investigation was guided by the Environmental, Social and Governance (ESG) lens and by the pillars of integrity and governance (compliance), seeking to identify how formal mechanisms were institutionalized and reported. The data collection technique was documentary analysis (Gil, 2019), appropriate for sources not previously treated and which constitute a stable record. This method allowed access to public information from the institution’s portal, without interaction with participants or sensitive data, preserving the cooperative’s anonymity.

For the data analysis, the technique of thematic content analysis (Bardin, 2016) was used. This set of systematic procedures involved the description and inference about the content of the messages present in the documents. The operationalization of the analysis followed a protocol structured in four stages.

The first stage of the protocol consisted of defining the research corpus, prioritizing documents published between 2020 and 2024, a period of consolidation of reporting and greater availability of comparable series. The corpus included annual sustainability reports, GRSAC, institutional sustainability plan, and sustainable finance framework, all available on the cooperative’s portal.

In the second stage, an exploratory reading of the documents was carried out to construct a coding frame. This was composed of a priori categories (governance and integrity; socio-environmental and climate risks; sustainable finance; indicators and materiality) and emergent categories, identified during the reading and familiarization with the material.

The third stage involved thematic coding of excerpts and extraction of evidence, recorded in a traceability spreadsheet. For each piece of evidence, the source document, year, page, excerpt, analytical category, and specific objective were noted, allowing for systematic organization of information.

The fourth and final stage of the protocol consisted of the analytical synthesis of the data, carried out by identifying convergences, gaps, and reporting consistency in the documents. The findings were treated as evidence of institutional disclosure, without the intention of auditing the effectiveness of the cooperative’s practices.

The operationalization of the specific objectives followed the analysis protocol. For the first objective, governance and integrity mechanisms related to ESG were mapped, coding policies, structures, roles, flows, and control instruments. For the second, materially relevant ESG indicators were consolidated into a single matrix, classifying them by axis, theme, and purpose, and recording definition, calculation method, unit, and data source when available.

For the third objective, which consisted of proposing guidelines applicable to cooperative management, the guidelines were elaborated from the findings of the mapping and the identified gaps. The recommendations were converted into applicable actions, such as roles, flows, minimum indicators, data governance, and reporting routine, focusing on integrity, transparency, and measurement.

The study presented limitations inherent to its documentary nature, restricting itself to what was publicly disclosed. Differences in scope and detail between document editions may have limited temporal comparability. The findings were interpreted as documentary evidence of structure, practices, and metrics, and not as an independent audit of effectiveness.

3. Results and Discussion

The research results were obtained through an in-depth documentary analysis of official and publicly available materials on the institutional portal of the studied credit cooperative. The documentary corpus included annual sustainability reports, reports on social, environmental, and climate risks and opportunities (GRSAC), the institutional sustainability plan, and the sustainable finance framework. The investigation was structured around the specific objectives of the study, seeking to map the formal governance and integrity mechanisms associated with the ESG agenda, consolidate a minimum set of relevant indicators, and propose guidelines to improve compliance, transparency, and measurement. The findings are presented as evidence of documentary disclosure, without the intention of auditing the effectiveness of the practices.

The composition of the documentary corpus revealed a diversity of documents, each with distinct purposes that influence the level of detail of the information. Strategic instruments, such as the Sustainability Plan, tend to present general guidelines and commitments. Technical frameworks, such as the Sustainable Finance Framework, specify criteria and eligibility. Risk reports, such as the GRSAC, structure categories and management processes. Finally, Sustainability Reports focus the narrative and performance metrics. This documentary variety, with a consistent time series between 2020 and 2024, allowed for a comparative reading and the identification of reporting patterns over time.

Formal governance and integrity mechanisms associated with ESG

Documentary analysis evidenced the presence of robust formal mechanisms related to governance, integrity, socio-environmental risk management, and transparency in the cooperative. A greater detailing of these mechanisms was observed in more recent documents, indicating an evolution in the institutional approach. The materiality and ESG priorities are indicated in the Sustainability Plan and the Sustainability Reports (2020-2024), reflecting the thematic prioritization and the declared organization of reporting. The governance structures and instances are evidenced in the Sustainability Reports and the GRSAC (2022-2024), demonstrating the existence of institutional responsibilities related to the topic.

The management of socio-environmental and climate risks is detailed in the GRSAC reports (2022-2024), which present the framework and management processes adopted by the cooperative. The transparency and reporting mechanisms are visible in the Sustainability Reports (2020-2024), whose time series allows for a comparative reading of reporting over the years. Additionally, the Sustainable Finance Framework defines technical eligibility and exclusion criteria, as well as establishing the documentary basis for the traceability of financial instruments, reinforcing the formalization of processes in this pillar.

Treating the ESG agenda as an institutional topic, with instruments for organizing reporting and references to structures and responsibilities, aligns with the recommendations of the Brazilian Corporate Governance Code of Best Practices (IBGC, 2020) and the Manual of Best Practices for Cooperative Governance (OCB, 2022). These documents associate governance maturity with the existence of formal instances, defined roles, and reporting flows that connect senior management to risk management. However, the mere presence of these formal elements does not guarantee the effectiveness of integrity, which, according to Candeloro et al. (2012), requires effective prevention, detection, and response mechanisms, something that documentary analysis does not allow to attest.

It is important to note that the existence of a risk management structure and a social, environmental, and climate responsibility policy also stems from regulatory requirements in the financial sector, according to CMN Resolutions nº 4.327/2014, 4.943/2021, and 4.945/2021. This suggests that part of the observed arrangement is not just a voluntary strategic choice, but also a response to a normative duty. The GRSAC reports (2022-2024) systematize the topic of socio-environmental and climate risk, while the sustainable finance framework functions as a technical instrument for framing and traceability of operations, reinforcing the role of formal criteria in the operationalization of the financial pillar.

Minimum indicators and measurement gaps

Based on the institutional report, a minimum set of materially relevant ESG indicators was consolidated, prioritizing those that are recurring and compatible with the environmental, social, and governance dimensions. On the environmental axis, indicators such as GHG Emissions (Scopes 1 and/or 2), Electricity consumption, Water consumption, Waste (generation and disposal), and Exposure to climate risk (physical/transition) were identified. For GHG Emissions, the Sustainability Reports (2020-2024) show reporting, but gaps include the calculation method, consolidation scope, and non-evidenced verifiability. Similarly, for Electricity consumption and Water consumption, the Sustainability Reports (2020-2024) report the data, but do not evidence the unit, scope, conversion factor, coverage, or comparable series.

Waste management, also reported in the Sustainability Reports (2020-2024), lacks evidenced classification and traceability criteria. Climate risk exposure, addressed in the GRSAC Reports (2022-2024), does not present evidenced methodologies and quantitative metrics. Regarding Sustainable Finance, the portfolio/operations with sustainable finance criteria are evidenced in the Sustainable Finance Framework and Sustainability Reports, but comparable annual consolidation criteria are missing.

On the governance axis, the Ethics and Compliance Training and the Whistleblowing Channel (registration and treatment) are reported in the Sustainability Reports (2020-2024). However, the training does not evidence the accounting criterion and target audience, and the whistleblowing channel does not present taxonomy and outcome indicators. On the social axis, Gender Diversity in Leadership and Turnover are reported in the Sustainability Reports (2020-2024), but without definition of leadership, specific breakdowns, calculation method, or evidenced population base. Health and Safety (accidents/absences) and Social Investment in the Community, also present in the Sustainability Reports, do not evidence scope of concepts (own/third-party) or measurement criteria and impact parameters.

The results indicate that, although metrics and initiatives are reported, there is significant heterogeneity in their specification, especially regarding the explicitation of the calculation method, scope, data source, and accountability. This finding corroborates the literature that points to the absence of methodological standardization as one of the main weaknesses of ESG reporting, compromising comparability between organizations and periods, and generating informational asymmetries between the entity and its stakeholders (Ferraz, 2023; Silva and Vasconcelos, 2021). From an integrity standpoint, disclosing indicators without proper explicitation of how they are calculated can be interpreted as a risk of selective communication, where the volume of information does not necessarily translate into substantive transparency. The analysis, therefore, highlighted the difference between what is evidenced and what is not, impacting reporting consistency and verifiability.

Data governance of indicators

The analysis of the governance of data for the indicators revealed a predominant pattern of absence of documentary evidence for minimum elements such as the owner, periodicity, and data source. For GHG Emissions (Scopes 1 and/or 2), Electricity consumption, Water consumption, Waste (generation and disposal), Exposure to climate risk (physical/transition), Portfolio/operations with sustainable finance criteria, Ethics and compliance training, Whistleblowing channel (registration and treatment), Gender diversity in leadership, Turnover, Health and safety (accidents/absences), and Social investment in the community, the data owner and source were not evidenced. Periodicity, when mentioned, is generally annual, but details about the reporting routine are scarce.

The absence of explicit information regarding these elements for various indicators constitutes a relevant finding. Although the cooperative reports indicators, public documents, in general, do not detail who is responsible for the data, what the primary source is, and what validation routines support the measurement. The completeness of the measurement, assessed by the presence or absence of components such as definition/metric, method, scope, source, ownership, and periodicity, demonstrated that the definition and periodicity of the indicators are consistently evidenced. In contrast, the method, scope, source, and ownership remain, as a rule, not evidenced.

This gap means that the report informs what is measured and how often, but not how, from what, and under whose responsibility. These attributes are fundamental for the auditability of the information. The finding reinforces that the maturity of reporting is not limited to the number of indicators disclosed, but also to the degree of specification and documentary governance that ensure the consistency and reliability of the data over time. The lack of traceability and clear responsibility for the data can compromise the integrity of the information and the ability of external stakeholders to verify it.

Guidelines applicable from the identified gaps

Based on the identified gap pattern, especially the absence of evidence regarding method, scope, source, and ownership for several indicators, three applicable and directly executable guidelines were consolidated for cooperative management, focusing on improving integrity, transparency, and measurement. The first guideline aims to enhance the temporal comparability of indicators. It is recommended to maintain consistent historical series throughout the reporting period (2020–2024) and to explicitly record any changes in scope, consolidation perimeter, or calculation methodology between editions. The adoption of restatements and multi-year comparative tables would allow the reader to distinguish real performance variations from variations arising from changes in criteria, a basic requirement for the reliability of non-financial reporting.

The second guideline consists of defining an audit trail (data lineage) and minimum evidence per indicator. For each reported metric, it is essential to link the primary data source, the responsible party (owner) for its calculation, the extraction date, and the validation procedure adopted. This set of metadata brings socio-environmental reporting closer to the practices already consolidated in financial information governance and enables third-party verification, reducing the risk of inconsistencies and strengthening the informational integrity required by the prudential regulations applicable to financial institutions. This measure is crucial to ensure the reliability and credibility of the disclosed data.

The third guideline proposes standardizing the calculation method for priority indicators. For each indicator, it is suggested to document the conceptual definition, the unit of measurement, the scope of coverage, and the conversion factors used, consolidating this information in a data dictionary versioned by annual cycle. Methodological standardization ensures that homonymous indicators are effectively comparable to each other and over time, a condition essential for ESG measurement to fulfill its function as a risk management and accountability tool, and not just institutional communication. The implementation of these guidelines can significantly strengthen the indicator cycle, from definition to reporting.

In summary, the study revealed that the analyzed credit cooperative demonstrates a progressive institutionalization of the ESG agenda, evidenced by the presence of formal instruments such as plans and frameworks, in addition to an annual report with a time series and specific documentation on socio-environmental and climate risks (GRSAC). However, the analysis also pointed out a methodological limitation inherent in the dependence on the level of documentary transparency, which means that internal processes may exist without being explicitly stated in public documents. Despite this, the recurrent absence of minimum data governance information for certain indicators constitutes a relevant finding, as it limits comparability and traceability, directly guiding the applicable guidelines presented to improve risk management and institutional transparency.

4. Conclusion

This study analyzed how the principles of cooperativism and the mechanisms of governance and integrity articulate with the ESG agenda in a large Brazilian credit cooperative, through documentary analysis. The presence of robust formal instruments, such as specific plans, frameworks, and reports, was verified, evidencing the progressive institutionalization of the environmental, social, and governance agenda. It was observed that the cooperative reports a series of indicators and initiatives related to these pillars, demonstrating a commitment to transparency. However, a significant heterogeneity was identified in the specification of these indicators, especially regarding the explicitation of the calculation method, the consolidation scope, the data source, and the attribution of responsibility (ownership). This gap compromises the temporal comparability and traceability of information, limiting the consistency of measurement. As a practical contribution, the work consolidated matrices of minimum indicators and data governance, in addition to proposing actionable guidelines to strengthen the indicator cycle, improve traceability, and align disclosed commitments with documentary evidence, aiming for better risk management and institutional transparency.

The research, of a documentary nature, was limited to information publicly disclosed by the cooperative, meaning that unreported internal practices may exist and were not contemplated. Additionally, differences in scope and detail between the editions of the analyzed documents may restrict perfect comparability between years, with the findings interpreted as evidence of disclosure rather than an audit of effectiveness. The gaps identified in the data governance of the indicators, which limit comparability and traceability, directly guide suggestions for future studies. It is recommended that subsequent research explore the implementation of the proposed guidelines, evaluating their effectiveness in methodological standardization, the definition of audit trails, and the improvement of temporal comparability of ESG indicators, contributing to enhance the integrity and reliability of socio-environmental reporting in the cooperative sector.

Bibliographic References

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Article originating from the Final Course Work of the Specialization in Compliance and ESG of the MBA USP/Esalq

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