ESG, an acronym for Environmental, Social, and Governance, is a set of standards measuring a business’s impact on the environment and society as well as how robust and transparent its governance is in terms of company leadership, executive pay, audits, internal controls, and shareholder rights. It measures how the business integrates environmental, social, and governance practices into operations, as well as the business model, its impact, and its sustainability.
Environmental
The environmental aspect focuses on how the business minimises its impact on the environment. It covers the business’s products/services, the supply chain and operations. ESG allows the business to target different areas of its organisation and implement more sustainable, ethical practices.
Social
The social aspect focuses on how a business impacts wider society and workplace culture. Companies can positively contribute to fairness in society, investing in fair and equal opportunities and conditions for employees, people working in the supply chain, and local communities.
Governance
Governance refers to the processes of decision-making, reporting, and the logistics of running a business. It also looks at the business’s ethical behaviour and its transparency with stakeholders about its activities. Governance is linked to the environmental and social aspects of ESG in that it looks at the transparency and decision-making behind them.
BD2P is providing full legal support in the process of implementing ESG into the internal infrastructure of a business.
For more information, please contact Milica Pešterić to milica.pesteric@bd2p.com.
