Environment social and governance

ESG is a set of standards that investors use to evaluate a company's performance in terms of sustainability, ethical practices, and social responsibility. In today's society, businesses are expected to be socially responsible and accountable for their actions, and ESG has become an important factor in the investment decision-making process. Investors are using the ESG criteria more and more often to evaluate investments based on a company's policies and to motivate businesses to act ethically towards the environment and society. ESG has drawn more attention in recent years, especially in the wake of the Covid-19 outbreak, and many investors now only invest in businesses that disclose on their ESG performance. The ESG factors can be broadly categorized into three areas: environmental, social, and governance. 1.Environmental issues encompass possible or current alterations to the built or natural environment, including pollution, effects on biodiversity, carbon emissions, climate change, and resource use. 2.Social issues include things like supply chains, diversity, and inclusion, supply chain safety, and potential or real impacts to the local community and workforce. 3.Corporate governance structures and procedures, including board composition and diversity, ethics, risk management, disclosure, and transparency, are all examples of governance challenges. ESG practises aid in the better management of environmental, social, and corporate risks. They also assist businesses in enhancing stakeholder interactions, cutting expenses, and improving reputations. Strong ESG practises help businesses perform better financially than their peers, draw and keep talent, increase productivity at work, build competitive advantage, enhance brand reputation, better prepare for uncertainty, avoid activist and regulatory interference, win customer loyalty, and preserve their social licence to operate.