Environmental, social and governance (ESG) is a framework comprising criteria for evaluating corporate practices and performance on various environmental, social, and ethical issues. It also provides a way to measure business risks and opportunities in those areas. ESG aims to place organizations on the path to long-term success through responsible corporate management and business strategies.

Environmental factors encompass an organization’s broader influence on the environment and the potential challenges and opportunities it encounters due to environmental concerns. Examples of environmental criteria include energy consumption and efficiency, carbon footprint, waste management, and water conservation.

Social factors pertain to how a company interacts with various segments, including employees, suppliers, customers, community members and so on. It encompasses the organizations relationships and the impact of these interactions on its operations and reputation. Examples of social criteria include Diversity, Equity and Inclusion (DEI), workplace health and safety, fair pay, and employee experience management.

Governance factors revolve around how a company regulates itself through internal controls and practices to ensure compliance with regulations, industry standards, and corporate policies. This is crucial to maintaining transparency, ethical conduct, and overall accountability within the organization.