ESG stands for Environmental, Social, and Governance and is a broad abstract framework that has become a catchphrase for businesses and their investors, covering:
Environmental
The conservation of the natural world, including current issues such as climate change, sustainability, carbon emissions, pollution, energy efficiency, and water scarcity.
Social
Taking into account people and relationships, such as employee engagement, community relations, human rights, and labor rights.
Governance
Governance standards and accountability for ESG standards implementation, board composition, audit committee structure, and anti-corruption.
Data Challenge
Although these ESG elements are not commonly included in mandatory financial reporting, we are seeing companies make disclosures in their annual reports as well as standalone sustainability reports, press releases, social media, news reports, and other channels.