ESG stands for ‘Environmental, Social and Governance’. It is a set of criteria that ethical or impact investors use to assess the impact of a company.
Environment looks at the impact that the company has on the environment e.g. pollution; water; waste management; climate change etc.
Social explores the company’s relationships with stakeholders i.e. employees, the community where the organisation is based, suppliers etc. It considers employment practices, supply chains, pay ratios etc
Governance covers compliance with regulators, pay ratios, shareholder rights and corporate leadership etc