What does ESG mean?
ESG stands for Environment, Social, and Governance, and has become a key concept for sustainable entrepreneurship. It is a framework that covers a wide range of activities and aims to evaluate a company not only based on financial metrics but also in terms of environmental and social responsibility, as well as corporate governance.
The Environmental Pillar
The environmental aspect concerns a company’s ecological footprint. This includes topics such as:
- Greenhouse gas (GHG) emissions
- Resource efficiency
- Waste and environmental management
- Energy efficiency
- Deforestation
The Social Pillar
This aspect relates to a company’s social responsibility toward its employees and society — its stakeholders. It 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, particularly aspects such as:
- Tax strategy
- Executive compensation
- Donations and lobbying
- Anti-corruption measures
- Corporate transparency
ESG criteria are becoming increasingly important for customers, investors, and governments, as they look for companies that embody these values. Moreover, ESG strategies can help businesses chart a clear path toward net-zero and the achievement of the Sustainable Development Goals (SDGs ).
%201.png)