What is ESG and Why Does It Matter?
ESG (Environmental, Social, and Governance) represents a framework that businesses use to measure their impact beyond financial performance. Investors, regulators, and consumers are increasingly holding companies accountable for their ESG performance.
- Environmental: Measures a company’s impact on nature (e.g., carbon footprint, resource conservation, waste management).
- Social: Focuses on how a company manages relationships with employees, suppliers, customers, and communities (e.g., diversity, labor standards, community engagement).
- Governance: Examines corporate ethics, leadership structures, transparency, and compliance.