ESG is a framework used to evaluate companies' sustainability and ethical impact. It consists of three key factors: Environmental, Social, and Governance.
The Environmental aspect of ESG evaluates a company's impact on the environment and how it manages its resources, including factors such as greenhouse gas emissions, energy efficiency, waste management, and sustainable sourcing.
The Social aspect of ESG evaluates a company's impact on society, including its relationships with employees, customers, and communities. This includes labour practices, diversity and inclusion, customer satisfaction, and community engagement.
The Governance aspect of ESG evaluates how a company is run and managed, including factors such as board composition, executive compensation, and transparency.
Investors and stakeholders are increasingly using ESG criteria to evaluate companies' long-term sustainability and performance. By considering environmental, social, and governance factors, they can make informed decisions that align with their values and promote sustainable, responsible business practices. In summary, ESG is a framework that helps businesses evaluate their impact on the environment, society, and governance and make responsible decisions that benefit all stakeholders.