What does ESG mean?
ESG stands for environment, social and governance and has become a key term for sustainable entrepreneurship. It is a concept that encompasses a wide range of activities and is intended to enable a company to be assessed not only on the basis of financial indicators, but also in terms of environmental and social responsibility and corporate governance.
The environmental pillar (Environmental)
The environmental aspect is about a company's ecological footprint. This includes topics such as:
- Greenhouse gas emissions (GHG)
- Resource efficiency
- Waste and environmental management
- Energy efficiency - deforestation
The social pillar (Social)
This aspect relates to the social responsibility of a company towards its employees and society, the so-called stakeholders. This includes:
- Working conditions
- Diversity, equal treatment and inclusion
- Product and service quality
- Supply chain standards
- Relationships with local communities
The governance pillar
Governance deals with corporate management, in particular with aspects such as
- Tax strategy
- Management Board remuneration
- Donations and lobbying
- Anti-corruption measures
- Transparency in the company
ESG criteria are becoming increasingly important for customers, investors and governments as they look for companies that reflect these values. ESG strategies can also help companies find a clear path to net zero and achieving the SDGs.
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