ESG is seemingly in conversations everywhere in the business world these days. The letters ESG are short for “environmental, social and governance.”
Simply stated, ESG refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. These criteria help to better determine the future financial performance of companies.
KPMG believes that acting on ESG issues was important before the global pandemic and will be even more important after it. And McKinsey states, “Your business, like every business, is deeply intertwined with environmental, social, and governance (ESG) concerns. It makes sense, therefore, that a strong ESG proposition can create value…”
Today’s business leaders need to have an understanding of ESG factors to create value for both their companies and shareholders.