Environmental, Social, And Governance (ESG) – A Framework For Corporate Sustainability


ESG investing considers a company's environmental, social, and governance practices alongside its financial performance. It provides a framework for evaluating and reporting on a company's corporate responsibility and sustainability. It helps investors to align their financial goals with their values and contribute to a more sustainable future.


ESG principles encourage organizations to adopt responsible and sustainable practices, fostering long-term value creation while minimizing negative impacts on the environment, society, and stakeholders. ESG investing is used by:
  • Individual investors seeking to make responsible investment choices.
  • Investment firms and financial advisors to create investment portfolios that consider ESG factors.
  • Companies to improve their ESG performance and attract ESG-focused investors.


The ESG framework is a set of standards for a company’s operations that socially conscious investors use to screen potential investments. By evaluating a company's ESG performance, investors can identify potential risks and opportunities that traditional financial analysis might miss. Strong ESG practices can indicate a company's long-term sustainability and resilience. ESG factors encompass:
  • Environmental: Climate change, energy use, pollution, resource management, and biodiversity.
  • Social: Labor practices, diversity, equity, inclusion, community engagement, and product safety.
  • Governance: Leadership, executive compensation, board structure, risk management, and transparency.
ESG differs from corporate sustainability which takes a broader view, encompassing the long-term viability and resilience of a company's operations while considering its impact on the environment, society, and the economy.

Sample Activity

Analyze an ESG Report:
  1. Choose a company you're interested in and find their latest ESG report.
  2. Review the report's sections on environmental, social, and governance practices.
  3. Identify the company's strengths and weaknesses in each area.
  4. Consider how the company's ESG performance aligns with your own values and investment goals.


The term ESG was first coined in 2004 by the United Nations Global Compact, the concept has been around for much longer.

Target Audience:

  • Educators
  • Leaders
  • Social Change Activists

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