ESG: Environmental, Social and Governance

 
ESG is one of those acronyms that seems to be everywhere these days. Some companies have made huge strides in ESG, and many of them are reaping the rewards. Others have just started down the path. And then there are some that are resisting, for better or worse. Whatever the situation in your company is, it’s important for you to know what ESG is all about.

On a very simple level, ESG is about paying attention to the non-financial impacts, risks, and opportunities in business. The “E” in ESG stands for “environmental.” This refers to a company’s impacts on the environment, its greenhouse gas emissions, its care for natural resources, and its resilience in the face of climate change.

The “S” in ESG stands for “social.” This pillar is all about the company’s relationship with it stakeholders, both internal and external. That includes employee engagement, as well as relationships with the surrounding community and its people. Finally, the “G” in ESG stands for “governance.” This is all about ethical and accountable leadership, board oversight, equity, and transparency.

make strides = make good progress
reap the rewards (benefits) = enjoy the good things that happen as a result
started down the path = take a course of action, move in a certain direction
pillar = here important part
employee engagement = the strength of the mental and emotional connection employees feel toward the organization that they work for
board oversight= a group of people who are responsible for making sure that an activity is done correctly and legally
equity = fairness and justice
transparency = a situation in which business and financial activities are done in an open way without secrets
accountable = obligated to explain, justify, and take responsibility for one's actions, and to answer to someone