What is ESG?
ESG stands for Environmental, Social, and Governance. These three factors are used to measure a company's sustainability and societal impact. Investors, businesses, and individuals increasingly use ESG criteria to make informed decisions about investments, partnerships, and everyday choices.
Environmental (E)
This factor evaluates a company's impact on the planet. Key considerations include:
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• Carbon footprint and greenhouse gas emissions
• Renewable energy use and energy efficiency
• Waste management and pollution control
• Water conservation and biodiversity protection
Social (S)
This aspect focuses on how companies interact with employees, customers, and communities. Key elements include:
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• Labor rights and fair wages
• Diversity, equity, and inclusion (DEI) policies
• Consumer protection and product safety
• Community engagement and philanthropy
Governance (G)
Governance assesses a company’s leadership, ethics, and transparency. Key factors include:
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• Board diversity and independence
• Anti-corruption policies and business ethics
• Executive compensation fairness
• Shareholder rights and transparency