Hey earth muffins! Just like with every topic, there are specific terms often used when people discuss environmental things. Climate change, “zero waste”, and today’s term: ESG. If you are in a career in business you have probably heard this more frequently as eco-friendly living becomes more mainstream and popular. So, what the heck is this “ESG”? Keep reading for a full explanation on this acronym!
What is “ESG”?
As you can probably tell, this isn’t an actual word. Instead, the letters E-S-G stand for three things: environmental, social, and governance. These three terms define a framework that can be used by stakeholders (aka you and me) to understand how an organization is dealing with these factors. Instead of just focusing on the typical sustainability impacts of a business, this framework emphasizes the fact that the long-term success of a business extends well beyond how they are impacting the planet.
The 3 Pillars of ESG:
- First up we have environmental, which is the main focus of this blog. This encompasses everything an organization does to impact the planet (good or bad). From emissions to using up natural resources, this pillar is extremely important.
- Next – social. When looking at this, everything from supplier relations to the pay of workers is considered.
- Lastly, we have governance. This pillar analyzes how an organization is led and managed. Transparency, accountability, and authenticity are important metrics to look at for this component.
Where Can You View an Org’s ESG?
With the rise of the sustainability movement, there has (thankfully) been a push towards emphasizing ESG in companies. Many large organizations actually publish an ESG or sustainability report along with their annual or quarterly filings. You can typically find these by Googling “ESG report for X company”. They are quite interesting to look through if you are deciding whether to support a brand or not. It will be fascinating to see how these reports evolve as the eco-friendly movement grows stronger with time.
So there you have it – I hope this clears up the question of “what is ESG”! I think it is a great framework to analyze a business with something other than sales or growth metrics. And it is an awesome way to choose companies to support with your dollars. Take some time to look through the sustainability reports of your favorite brands. Do their reports align with what they advertise as being “green”? Comment below and let me know if you read any ESG reports!
Love,
Jenna ♥
This is so interesting! Thank you for explaining <3