ESG 101: What Is ESG, and Does It Matter?

What's behind the controversial investment strategy?

Environmental, Social and Governance, or ESG, is a framework of standards measuring a company’s risks and impacts alongside financial factors. Companies use ESG reporting as a tool to disclose data on emissions, waste management, employee satisfaction, anti-corruption practices and more. 

ESG reporting promotes transparency and engagement in business practices, especially when considering sustainability and social equity. ESG reporting intends to hold investors and companies accountable for their business practices and emissions. 

As more investors weigh the potential impact of global warming and climate change on the long-term returns of investments, ESG reporting has rapidly become more popular. 

But companies can also recognize benefits from ESG compliance. Companies that take the time and resources to become more sustainable and equitable can attract more investors, improve their credit ratings and outperform competitors. 

In essence, ESG aims to identify and mitigate risk within a business or organization. ESG reporting also empowers investors to make more informed decisions and helps companies adjust to (and benefit from) changing consumer priorities.

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This article was originally published on EchoWatch.com on December 6, 2022.  Link to the original article is here: https://www.ecowatch.com/esg-101-what-is-esg-and-does-it-matter.html