What is ESG?
E – Environment: How the company treats the environment
S – Social: How the company treats their stakeholders
G – Corporate Governance: How the company manages and directs its operations
Environment:
Environment looks at how the company is adapting to handle climate change, sustainability, and animal welfare.
Social:
Social looks at whether the company’s workforce is diverse in terms of race, gender and more. Additionally, Social looks at whether the company abides by human rights standards in its main company and along its supply chain. Lastly, it enforces consumer protection; whereby services and products are faithful to what was promised.
Corporate Governance:
Corporate Governance includes management structure, culture, employees’ relations, and whether executive employee compensation is fair.
*This list of factors for ESG is not exhaustive.
ESG is not very tangible as it includes many non-financial factors. However, many companies have...