Environmental, Social and Governance (ESG)

Environmental, social and governance (ESG) are a set of standards for company operations and a measure an organisation’s awareness of social and environmental factors which are now becoming criteria used by many socially conscious investors. It can be thought of as a form of corporate social credit score and considers various factors from the Environmental, Social and Governance fields. This is now becoming more important for every organisation and can certainly add creditability and weight to a company’s reputation which can help to give an edge in an increasingly competitive market.

Investors in recent years have shown interest in putting their money where their interests are aligned and as a result, brokerage firms and mutual fund companies have started offering Exchange Traded Funds (ETF’s) and other financial products that follow ESG criteria. This is often referred to as sustainable or socially responsible investing and to assess a company based on ESG criteria, investors will look at a broad range of behaviours.