Environment, Social, Gouvernance
1. Environmental (E):
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This pillar refers to how a company’s operations impact the environment and how it manages environmental risks and opportunities. Key issues include:
• Climate change and carbon emissions
• Resource use and conservation
• Waste management and pollution
• Biodiversity protection
• Renewable energy initiatives
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The Environmental aspect emphasises reducing carbon footprints, conserving natural resources, and complying with environmental regulations to mitigate risks associated with climate change and resource depletion.
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2. Social (S):
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The Social pillar addresses how a company manages relationships with employees, suppliers, customers, and communities. This includes:
• Employee well-being, diversity, and inclusion
• Human rights and ethical labor practices
• Community engagement and corporate philanthropy
• Consumer protection and product responsibility
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The Social aspect focuses on promoting ethical practices, ensuring workplace equality, and improving the social impact on surrounding communities, enhancing a company’s reputation and long-term value.
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3. Governance (G):
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Governance refers to the internal system of practices, controls, and procedures that a company adopts to govern itself. This includes:
• Board composition and leadership structure
• Executive compensation
• Anti-corruption policies
• Shareholder rights and transparency
• Risk management and compliance with laws
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Good governance ensures accountability, transparency, and alignment with shareholder interests, fostering long-term corporate resilience and trust.
Difference with CSR -
Corporate Social Responsibility:
• CSR: Corporate Social Responsibility focuses on a company’s overall impact on society and its ethical obligations. It often involves initiatives such as charitable donations, volunteer programs, and efforts to reduce environmental harm. CSR is typically more voluntary and can vary widely between companies based on their values and goals.
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• ESG: While CSR is about a company’s moral responsibilities, ESG refers to specific, measurable factors that are often used by investors to assess a company’s risks and long-term sustainability. ESG is more data-driven and standardized, with a stronger focus on risk management and investment impacts. It serves as a framework to integrate sustainability into core business operations rather than separate initiatives .
In essence, ESG takes the broader concepts of CSR and makes them actionable, measurable, and more deeply integrated into a company’s governance and strategy.