ESG stands for Environmental, Social, and Governance criteria. ESG refers to the three key factors when measuring the impacts of an investment in a company or an organization. These factors include issues like diverse and inclusive workplaces, following high ethical standards, the efficient use of energy, and recycling.
ESG, at its core, is a corporate governance and investment framework. ESG Investing is the consideration of environmental, social, and governance factors alongside financial factors in the investment decision-making process. ESG factors and data help to identify risk-adjusted returns and highlight relevance to capital opportunities. What this means in practice is companies that adopt ESG principles consider, measure, report (and, hopefully, work to improve) the environmental, social, and governance aspects of their business alongside its financial considerations (profit, expenses, growth, accounting).
Sustainability & CSR address the environmental, social, and economic goals of a system aiming at a development that is ecologically sustainable, socially equitable, and economically efficient.
By Maria VELUDO, PhD