Exploring the ESG Framework

The ESG (Environmental, Social, and Governance) framework is a set of criteria that investors and organisations use to evaluate a company’s performance across these three key areas.

• Environmental aspects consider a company’s ecological footprint. This might include elements such as the company's greenhouse gas emissions, its approach to renewable energy, waste disposal methods, and water conservation efforts.
• Social aspects assess a company’s societal impact. This includes the company's employment practices, its commitment to human rights, community development initiatives, and the safety standards of its products or services.
• Governance aspects focus on a company’s internal governance structure. This involves the structure of the board of directors, executive remuneration policies, and the rights of shareholders.

The Benefits of the ESG Framework

• Companies that score highly on ESG factors are likely to attract investors and customers who value sustainable practices.
• Such companies are often more resilient to changes in environmental and social landscapes.
• The ESG framework can help companies identify areas for improvement, reduce risks, and enhance their brand's reputation.
• By adopting and reporting on ESG metrics, companies can demonstrate their commitment to sustainability, transparency, and social responsibility.