Why investing in youth is the most cost-effective ESG strategy for securing the future market

Companies that invest in young people aren’t just engaging in philanthropy. They are systematically and with a long-term perspective shaping the consumer market itself, the talent pipeline itself, and the social license to operate over the next twenty years.

Executive Summary

May saw the maturation of a discussion that had been gaining momentum since the entry into force of CVM Resolution 59 and Brazil’s adoption of IFRS S1/S2. It is worth reviewing what each entails, as most executive boards still treat both as matters for the legal department. CVM Resolution 59, in effect since 2024, requires publicly traded companies in Brazil to disclose structured sustainability information annually in the Reference Form, with the same level of rigor and auditability required for financial data. IFRS S1 and S2 are the first two global standards published by the ISSB (International Sustainability Standards Board), a body created by the IFRS Foundation in 2021 to standardize sustainability reporting worldwide. S1 covers general sustainability risks and opportunities. S2 covers climate risks and opportunities. The CVM approved the adoption of these standards in Brazil on a voluntary basis starting in 2026 and mandatory starting in 2027 for publicly traded companies, funds, and insurance companies.

What this regulatory framework changes in practice is simple. From now on, corporate reputation will not be built in the public relations office. It will be built on the ground, alongside those who experience the impact, with documented evidence that can withstand an audit. In this context, youth educational programs have become the most underestimated ESG (Environmental, Social, and Governance—the three pillars that organize corporate sustainability reporting) asset by most Brazilian companies, and the most defensible in any climate or social due diligence. Investing in young people is, above all, a strategic decision for business continuity. The return appears on three simultaneous fronts: brand, talent, and social license.

This article weaves together four perspectives that emerged from conversations with ESG directors throughout May. Why well-communicated projects build reputational capital and attract new sponsors. Why investing in youth is the most cost-effective strategy for securing future market share. How real trust is built by co-creating with the community, not for it. And why ESG reports that withstand investor pressure are the result of well-executed projects, never the other way around.

Youth as an investment: the most cost-effective ESG strategy for securing future markets

There is a calculation that few companies make with the honesty it requires. Every brand depends on two things to survive over the next twenty years: people capable of working for it and people willing to buy its products. Programs that invest in youth address both ends of the spectrum at the same time. That is why, from the perspective of long-term reputational return, they are the best social investment a company can make—and simultaneously the most cost-effective in relation to the impact they produce.

Brazil has approximately 50 million young people between the ages of 15 and 29. Of this group, 22% are neither in school nor employed, according to the most recent PNAD Contínua (Continuous National Household Sample Survey, conducted by the IBGE). Companies that build bridges to this population—whether through digital literacy programs, technical training, professional mentoring, or education on the SDGs (the UN’s Sustainable Development Goals, a global agenda of 17 targets set for 2030)—transform a structural national problem into a brand connection. A connection built at this stage of life, with a methodical approach, lasts for decades.

Programs that become part of a sponsoring company’s reputational capital share four key elements. Pedagogical continuity, because one-off sessions do not change trajectories, and multi-stage programs generate longitudinal data. Connection to the real world, because young people need to see how knowledge connects to the work that actually exists there, and companies that open their operations for technical visits and mentoring double the program’s value. Metrics beyond “students reached,” because completion rates, verified learning, and career placement measure impact, while headcount measures only attendance. And editorial curation of alumni, because tracking and telling the stories of those who went through the program three and five years later transforms social investment into a capsule of lasting reputation.

According to the indicators published on conhecendoosods.com.br for the period from January 2023 to July 2024, the “Conhecendo os ODS” program reached 168,061 people directly and had an indirect impact on 504,183 people across 75 cities in 15 Brazilian states. A total of 75,927 students and 4,191 teachers were involved, and the program generated 2,915 direct jobs over the course of the cycle. This multiplier effect—where the indirect impact reaches three times the number of people reached directly—is no accident. It is the result of a design that combines structured educational content, training for local educators, and the curation of stories from program alumni. Companies that sponsor programs with this architecture generate indicators aligned with SDG 4 (Quality Education) and SDG 8 (Decent Work). These are two of the most relevant factors for climate and social reporting in the regulatory cycle starting in 2026 and beyond.

A ripple effect: why well-communicated projects attract new partners

There is a hidden economic value that few companies measure: the multiplier effect of impact storytelling. When a social program is well documented—with baseline and follow-up data, compelling testimonials, and high-quality visual content—it ceases to be just a project. It becomes evidence. And evidence attracts partners who wouldn’t be reached through press releases or sales pitches.

“Every company will have to demonstrate how it is working to build a more inclusive and sustainable economy, and how its practices generate long-term results. Transparency is no longer optional,” wrote Larry Fink, CEO of BlackRock, in his annual letter to CEOs.

The practical difference lies in the unit cost of reach. Programs that generate word-of-mouth buzz, attract new sponsors in subsequent cycles, and produce reusable content significantly reduce the cost per person reached starting in the second year. The first investor paves the way. Effective communication turns the rest of the chain into a multiplier, and what was once a marketing cost becomes a shared portfolio asset among subsequent sponsors.

Three conditions are common to all programs that scale up in this way. First, verifiable baseline and follow-up data, because without a before-and-after comparison, any impact figure is an optimistic estimate. Second, personal stories told by the beneficiaries themselves, because institutional reports do not resonate as much as human testimonials. Third, editorial coverage planned as an input for each stage, not as an accountability deliverable at the end of the cycle, because what was not captured in the field is difficult to reconstruct later.

Trust is built together: the difference between projects done for the community and projects done with the community

Every company operating in Brazil faces a simple reputational equation. It is either seen as part of the community where it operates, or it is seen as an outsider. Visitors have little credibility when things go wrong, and in the image crises that have become routine in corporate news over the past five years, the difference between a company that has a community defending it and one that stands alone can be the difference between a week of turbulence and a quarter of declining revenue.

Trust cannot be bought with a ribbon-cutting ceremony or a press release distributed to the local media. It is built over time through listening, through engagement with leaders, through the assessment conducted before the project begins, and through the co-creation of the design with those who will experience its impact. It is a slow process, counterintuitive to corporate speed, and that is precisely what distinguishes brands with a social license to operate from those that rely solely on a regulatory license.

The five signs that appear in companies that build genuine trust with the local community are recognizable. A pre-project assessment, including field research on who lives there, what they need, and what already exists. Documented active listening, through roundtable discussions, interviews with community leaders, and mapping of local organizations—all recorded and cited in the final project. Co-creation of the design, in which the community participates in defining what will be done, not just in the execution. Shared governance, with local leaders having a say in decisions to adjust the program throughout the cycle. And a commitment to continuity, because companies that return to the community year after year build a reputation that no PR campaign can replicate.

From reporting to real impact: why the best ESG reports are a consequence, not a cause

There is a well-known pitfall in the Brazilian ESG market. Companies start with the report, hire consultants to fill in the framework, realize they lack evidence, and rush to come up with projects that support their narrative. The result is usually predictable: a polished report, superficial impact, and exposure when someone checks the facts. In a regulatory cycle like the one ahead, with climate and social audits becoming mandatory, this approach is no longer just ineffective. It has become a risk.

The path to building authority is the reverse. Well-designed projects, with a clear methodology, metrics, and scope, generate the evidence. Evidence feeds the report. The report becomes a defensible reputational asset, capable of withstanding pressure from savvy institutional investors and passing third-party audits without last-minute tweaks. Those who follow this sequence will arrive in 2026 ready for the mandatory adoption of IFRS S1/S2. Those who reverse the sequence face regulatory, reputational, and capital risks simultaneously.

Four criteria distinguish reports that support due diligence from those that become problematic at the auditor’s first question. A baseline measured before the project begins, because without an initial comparison, any change is merely an estimate. Indicators linked to the company’s core business, because a social program disconnected from the business’s central focus is charity, not strategy. Independent auditing is possible, with field documentation, a list of beneficiaries, proof of attendance, and testimonials collected with image release forms, organized in a way that third parties can verify. And consistency across channels, because inconsistencies between the ESG report, the website, the newsletter, and the CEO’s statements in interviews are the first sign of greenwashing that a trained analyst picks up on. Companies that do the groundwork in the right order arrive at the reporting cycle with evidence already packaged. The report, in this process, is the easy part. The hard work lies in the project that came before.

Authority is what remains when the cycle of incentives ends

May began with a question that applies to any company investing in social responsibility today. Are you putting together a report, or are you building a legacy? The answer changes everything. Companies that build a legacy integrate social investment into their strategy, choose programs that make sense for the local community and align with the company’s values, measure impact with audit-level rigor, and use what they learn to improve programs in the next cycle. Companies that build reports follow a framework, submit the document, and discover, in the next cycle, that they need to start from scratch.

The four pillars of this article are part of a single movement. Communicating effectively what you do is what multiplies your impact. Investing in youth is what connects the brand to the future. Building together with the community is what creates legitimacy. Reporting with evidence is what transforms your work into a reputational asset. None of these pillars, on its own, guarantees authority. All four, when integrated into strategic planning, do.

Authority is what remains when the Rouanet Law cycle ends, when the press release is forgotten, when the photo from the opening ceremony disappears from the feed. What remains is the bond with the community, the documented history, the trained young people, the data that others now cite. That is the asset no advertising campaign can build. And it is the asset every company operating in Brazil will need over the next five years, when the capital market learns to separate rhetoric from evidence with the same cold detachment with which it currently separates revenue from expenses.