ESG stands for Environmental, Social, and Governance. It is a set of standards used to measure a business's impact on society and the environment, as well as how transparent and accountable its governance practices are
- Environmental criteria evaluate how a company minimizes its impact on the environment, such as reducing carbon emissions, using renewable energy, and managing waste responsibly
- Social criteria assess how a company manages relationships with employees, suppliers, customers, and communities, focusing on fairness, diversity, labor rights, and community engagement
- Governance relates to corporate leadership, executive pay, audits, internal controls, and shareholder rights, ensuring transparency and accountability in company management
ESG is widely used in investing to evaluate companies' sustainability and ethical impact, influencing investment decisions and business strategies
. It has become a key factor for long-term business success and risk management
. In summary, ESG represents a comprehensive framework for responsible and sustainable business practices encompassing environmental stewardship, social responsibility, and sound governance.
