What is Environmental, Social, and Governance (ESG) ?
Environmental, Social, and Governance (ESG) is a framework used by investors to assess the sustainability and ethical impact of companies in which they invest. It is a set of criteria that helps investors evaluate a company's performance in three key areas: environmental stewardship, social responsibility, and corporate governance. By considering these factors, investors can make informed decisions about where to allocate their capital and support companies that prioritize sustainable practices and positive societal impact. The environmental aspect focuses on reducing greenhouse gas emissions, conserving resources, and protecting biodiversity. The social aspect emphasizes diversity, inclusion, labor rights, and community involvement. The governance aspect focuses on board composition, risk management, and stakeholder engagement. Overall, ESG helps investors support companies that prioritize sustainable practices and positive societal impact.