ESG stands for Environmental, Social, and Governance.
It is an approach to evaluate the way in which a corporation works to achieve a certain set of environmental goals, social goals and corporation goals .
It is sustainable and ethical impacts of company’s corporate financial interests
It refers to a set of criteria used by investors and other stakeholders to evaluate a company’s performance and sustainability practices.
Environmental: This aspect focuses on a company’s impact on the environment, including its carbon footprint, resource usage, waste management, and efforts towards sustainability and conservation.
Social: This pertains to a company’s relationships with its employees, customers, suppliers, and the communities in which it operates. It encompasses issues such as labor practices, diversity and inclusion, human rights, product safety, and community engagement.
Governance: This involves the structure and practices of corporate governance within a company, including its leadership, board composition, executive compensation, shareholder rights, transparency, and ethical standards.
ESG considerations are becoming more and more significant for investors who want to reduce long-term risks related to social and environmental issues or who want to match their investments with their values. Businesses that score highly on environmental, social, and governance (ESG) criteria are frequently perceived as being more responsible, resilient, and well-positioned for long-term success.
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