ESG – Environmental, Social & Corporate Governance
ESG – Environmental, Social and Corporate Governance
ESG (environmental, social and governance) is a generic term used in capital markets and
used by investors to evaluate corporate behaviour and to determine the future financial
performance of companies.
It describes the three main areas of concern that have developed as the central factors in
measuring the sustainability and ethical impact of an investment in a company or business.
ESG factors are a subset of non-financial performance indicators that includes sustainable,
ethical and corporate governance issues such as managing the company’s carbon footprint
and ensuring there are systems in place to ensure accountability.
A company’s ESG activities have the potential to positively impact its financial performance
over the long term.