ESG/Environmental, Social, and Governance is a framework used by investors, companies, regulators, and activists to evaluate how a business addresses non-financial factors beyond traditional measures such as revenue, profit, debt, and return on capital. Environmental factors may include energy use, emissions, pollution, and resource management. Social factors may include labor practices, workplace policies, customer relationships, community impact, and diversity initiatives. Governance factors may include board structure, executive compensation, shareholder rights, transparency, and compliance. Supporters view ESG as a way to measure long-term business risks and corporate responsibility. Critics argue that ESG can blur fiduciary accountability by injecting political, social, or ideological objectives into business and investment decisions.
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