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ESG stands for environmental, social, and governance. It is a framework used to assess an organization’s performance on environmental, social, and governance factors. ESG factors are becoming increasingly important to investors, as they seek to invest in companies that are making positive contributions to society and the environment.
Environmental factors consider how a company safeguards the environment, including corporate policies addressing climate change, for example. Social factors examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
ESG stands for Environmental, Social, and Governance, and it refers to the three key factors that measure the sustainability and societal impact of an investment in a company or business.
There are a number of ways to measure ESG performance. Some common methods include:
Environmental
Greenhouse gas emissions, water usage, waste production, and environmental compliance.
Social
Employee relations, diversity and inclusion, community engagement, and human rights.
Governance
Board composition, executive compensation, shareholder rights, and corporate transparency.
ESG investing is a growing trend, as investors seek to align their investment decisions with their values. There are a number of ESG investment products available, including mutual funds, ETFs, and individual stocks.
It can help to reduce risk: Companies with strong ESG practices are often more resilient to shocks and stresses, such as changes in the regulatory environment or natural disasters.
It can improve financial performance: Companies with strong ESG practices are often more profitable and have higher valuations.
It can help to create a more sustainable future: ESG investing can help to promote environmental protection, social justice, and good governance.
(Copy Right @ India ESG)
