Environment, Social, Governance (ESG)
ESG, which stands for Environmental, Social, and Governance, is a framework used to evaluate a business’s non-financial performance in environmental impact, social responsibility, and governance practices. The increasing interest in measuring and ranking ESG by investors and other stakeholders reflects the recognition that environmental, social, and governance aspects are crucial in assessing business success.
Environmental factors encompass a company’s policies on climate change, decarbonisation efforts, natural resource management, pollution and waste management, and other related factors. Social criteria encompass human rights, labour standards across the supply chain, community integration, and additional social dimensions. Governance includes business ethics, compliance, accurate accounting practices, executive salaries, shareholder structure, and the company’s commitment to integrity and diversity in leadership selection.
