ESG Explained
Environmental:
How a company performs as a steward of nature. This includes their efforts in reducing carbon footprints, managing waste, and utilising renewable energy sources.
Social:
How a company manages relationships with employees, suppliers, customers, and communities. This encompasses labour practices, diversity, and community engagement.
Governance:
How a company governs itself. This includes leadership, executive pay, audits, internal controls, and shareholder rights.
In summary, as stakeholders increasingly prioritise sustainable and ethical practices, integrating ESG criteria is essential for companies aiming to thrive in today's market. However, businesses should not incorporate ESG factors merely to please stakeholders but also because it represents a sound and responsible approach to operations.
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