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Sometimes, investors and companies like to think more than profit and money. They want to think about the environment, human rights and working conditions for employees
If a company has been contributing negatively to the environment by cutting trees to making factories or releasing chemicals into the water and an investor has been investing in them heavily, they (investor) are enabling these negative contributions to take place. They are investing in the company to damage the environment
The ESG framework doesn’t just involve environment, it involves other issues as well like human rights, income inequality in the company, compliance with nationals and local government policies and diversity.
Includes a company’s impact on the planet through its carbon footprint, how it uses and extracts its natural resources and the risks the business will face because of climate changes.
The company’s policies or measures that commit to environmental sustainability fall under this category
This part of ESG refers to how a company gives back to community and the treatment of its employees.
It can address issues like income inequality, lack of diversity and inclusion and company culture.
Refers to the company’s governance as leadership and how a company complies with its local and national policies.