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Environmental, Social, and Governance (ESG)

Environmental, Social, and Governance (ESG) refers to the three central factors used to measure the sustainability and societal impact of an investment in a company or business. These criteria help investors assess the ethical impact and sustainable practices of a company beyond traditional financial metrics. ESG considerations are integral for companies striving to foster long-term growth, reduce risks, and create value in a conscientious manner.

Environmental criteria examine how a company performs as a steward of nature, focusing on initiatives related to climate change, resource conservation, waste management, and biodiversity. Social criteria look at how a company manages relationships with employees, suppliers, customers, and communities, including labor practices, diversity, human rights, and corporate social responsibility. Governance criteria evaluate a company’s leadership, internal controls, shareholder rights, and transparency, including executive pay, board diversity, and business ethics.

By incorporating ESG factors into their strategies, companies can enhance their reputation, gain investor confidence, and contribute to a sustainable future. Adopting and integrating ESG principles is not only beneficial for the environment and society but also promotes robust governance and economic resilience.