What's ESG？
What does ESG stand for?
ESG stands for Environmental, Social, and Governance, which is a framework used to evaluate and measure the sustainability and societal impact of an organization or investment.
1. Environmental
The company's impact on the environment, including its resource and energy usage, greenhouse gas emissions, waste management, pollution, and efforts towards conservation, and sustainable production and consumption.
2. Social
The company's relationships with its stakeholders, such as employees, customers, suppliers, and local communities. Factors include labor practices, human rights, diversity and inclusion, community engagement, and product safety.
3. Governance
The company's internal management and decision-making processes. Important aspects are considered, such as board composition, executive compensation, transparency, ethical behavior, and the presence of effective oversight and controls.
What does ESG stand for?
- From environmental perspective, companies’ operations may contribute to climate change, pollution, or resource depletion, which may have potential consequences on ecosystems and public health.
- The social interaction between the companies and the public, like prioritizing social responsibility may influence the well-being and quality of life of the employees, customers, and the communities in which they operate.
- The governance of companies closely tied to the public’s interest in ensuring transparency, accountability and ethics of business practices, which determines whether the they act in the best interests of all stakeholders.