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Environmental, social and governance (ESG) are the three pillars in measuring the sustainability and ethical impact of an investment in a company.
To break it down, the environmental criteria considers how a company performs as a steward of nature. The social criteria examines how a company manages relationships with their employees, suppliers, customers and the communities where they operate. Lastly, governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
Although certain risks can affect different sectors and companies, we’ve compiled a list of the top 10 factors, according to MSCI, that are the key issues underlying the ESG landscape.
Environmental
1. Climate Change
- Carbon Emissions
- Product Carbon Footprint
- Financing Environmental Impact
- Climate Change Vulnerability
3. Pollution & Waste
- Toxic Emissions
- Toxic Waste
- Packaging Material & Waste
- Electronic Waste
2. Natural Resources
- Water Stress
- Biodiversity
- Land Use & Animal Welfare
- Raw Material Sourcing
4. Environmental Opportunities
- Clean Tech
- Green Building
- Renewable Energy
Social
5. Human Capital
- Labor Management
- Health & Safety
- Human Capital Development
- Supply Chain Labour Standards
- Diversity
7. Social Opportunities
- Accessto Communications
- Accessto Finance
- Accessto Health care
- Opportunitiesin Nutrition & Health
6. Product Liability
- Product Safety & Quality
- Chemical Safety
- Privacy & Data Security
- Investment Health
- Demographic Risk
8. Stakeholder Opposition
- ControversialSourcing
Governance
9. Corporate Governance
- Board
- Pay
- Ownership
- Accounting
10. Corporate Behaviour
- BusinessEthics
- Anti-CompetitivePractices
- TaxTransparency
Corruption & Instability - FinancialSystem Instability
ESG Compliance Attracts New Investors
You’re probably wondering, “Why should my company bother with ESG compliancy?”
The short answer is: investors care! Being ESG complaint is an increasingly important way for investors to evaluate companies for investment consideration. It allows investors to avoid companies that might pose a greater financial risk.
In fact, according to IR Magazine, investors believe ESG will become the norm in just five years. As well, in a survey by Natixis Investment Managers 46% of institutions who implement ESG say they believe this analysis is as important to their investment process as traditional fundamental analysis.
Share Your ESG Story
BTV-Business Television is now booking feature company spots for their upcoming Fall ESG Episode.
If you think your company is an innovator in ESG, click the link here to to apply.
BTV is broadcast to millions ofinvestors on TV via BNN Bloomberg, BIZTV across the US, Air Canada and 12+ topfinancial sites including Reuters terminals, Yahoo Finance, Stockhouse andmore.
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