ESG pillars - what are they?
ESG pillars - what are they?
ESG is an acronym that is increasingly present in our lives, especially in its business aspect. Although it is also increasingly entering our homes, but I will write about that at another time. Today, let's focus on business. So what are we talking about? ESG is about three basic pillars.
Environment
The task of the first one, E (environmental - environment) is to protect and prevent environmental degradation. In practice, this means that any organization wishing to be considered responsible should adopt an environmental policy. A good policy includes an action plan and a system for verifying this plan, that is, it is based on specific goals and their measures. This will make it possible to measure and then also verify the assumptions made. However, the starting point for creating a strategy must be the identification of the risks to business resulting from climate change. Without this, we will not construct a good strategy.
Climate risks
In this area, companies should focus on such aspects as:
energy consumption
emissions
supply of raw materials
water management
energy from renewable sources (RES).
Social responsibility
Another element of the ESG, or S, concept is social responsibility (social responsibility). Here we take as our goal all relationships and the impact of the organization on people and society. Activities in this regard should be carried out with regard to people inside the company (employees), as well as outside (local community, investors, shareholders and other stakeholders). The manifestations of the organization's activities in this regard can be many, for example, internally they may involve, for example, equal pay for the same positions regardless of gender, observance of employee rights, data security and protection, or combating any inequality. An extremely important role in this aspect is played by honest and reliable internal communication.
Governance
Corporate governance - G (governance) is the last pillar of the ESG concept. Particularly important for investors, as it affects confidence in the company and the business conducted. Here the focus is on aspects such as corporate governance, the structure of the company's board of directors, respect for disclosure obligations to shareholders, executive compensation, respect for shareholder rights, tax transparency, anti-corruption and anti-bribery, or a sustainable supply chain.