What is ESG?

Many businesses are confused about the meaning of ESG. Historically, environmental, social, and governance movements have applied to investing. However, the combination of consumer demand and government regulations has prompted a more widespread application of these principles—one that reaches suppliers, employees, and customers alike.

In a nutshell, an ESG framework helps target how your business deals with the many risks and opportunities that surround issues of sustainability, inclusivity, and logistics among others. These can include net zero goals, carbon neutrality, social impact standards, and even shareholder’s rights. Many ESG plans will include elements of corporate sustainability (environmental goals) alongside corporate social responsibility (social) such as philanthropic efforts, inclusivity, and diversity standards, as well as governance issues.

No matter which of these areas you decide to focus upon, it is important to be very clear about your ESG plan and goals when communicating with customers, partners, and more in order to avoid ESG fines.