ESG, or Environmental, Social, and Governance, refers to the set of commitments a company makes in an effort to be socially conscious and create a positive impact. An organization’s ESG policies and targets might include climate goals, relationships between leadership and employees, building an inclusive company culture, and so much more.
The term ESG also involves how organizations measure their social and environmental impact, as well as how that information is reported to investors and the general public. Transparency is key when communicating with stakeholders, and comprehensive ESG policies ensure that learning about organizational impact is easy and accessible.
The environmental piece of ESG involves all of the ways in which a company directly and indirectly impacts the environment, as well as the practices and policies that guide this impact. This includes, but is not limited to, greenhouse gas emissions, waste, water usage, and management of natural resources.
The social component encompasses culture and community within an organization. Equity, Diversity & Inclusion initiatives fall under this section, along with ethical employment practices, community relations, and philanthropic endeavours.
Governance is all about how a company interacts with stakeholders and how those in leadership roles are managing the logistics that apply to its operations. Think of topics such as risk management, how decisions are made, transparency in accounting methods, and ethical business. +