Definition of ESG and sustainability
ESG refers to a set of criteria that investors and other stakeholders use to evaluate a company’s impact on the planet beyond just its financial performance. The business benefits of incorporating ESG considerations into enterprise practices are diverse and can positively impact various aspects of a company’s operations. ESG principles help evaluate the sustainability and ethical impact of an organization’s operations. Here’s a breakdown of the ESG components.
Environmental impact
This dimension assesses how a company manages its impact on the environment – impact on climate, biodiversity, and its usage of natural resources:
- Climate change: Efforts to reduce greenhouse gas emissions, energy efficiency, and renewable energy usage
- Resource usage: Sustainable sourcing of raw materials, energy management, water management, fuel management, and waste reduction
- Biodiversity: Initiatives to protect...
