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.
Sustainability is all about meeting the needs of the present without compromising the ability to meet the needs of future generations. Instead of today’s linear ‘take, make, depose’ economic model, companies like Hewlett-Packard, who recently unveiled the world’s first printer with closed-loop recycled plastic, and Procter & Gamble, with its ongoing focus on creating a new method to recycle plastic for reuse, are helping to drive the circular economy concept of ‘return and renew’ as part of their approach to sustainability in business.
- Is it time to tie executive compensation to sustainability? Learn more here.
- Learn more sustainability in today’s business world here.
- Read about the circular economy concept here.