ESG stands for Environmental, Social, and Governance. It’s a framework used to evaluate how responsibly a company operates in three key areas:
- Environmental: How a company impacts the planet (e.g., carbon emissions, energy use, waste management).
- Social: How it treats people (e.g., employee rights, community engagement, diversity and inclusion).
- Governance: How it’s run (e.g., board structure, ethics, transparency, executive pay).
In short, ESG helps investors and stakeholders assess a company’s long-term sustainability and ethical impact beyond just financial performance.