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ESG is a set of criteria by which companies are evaluated in addition to their financial performance
In recent years, the term “ESG” has gained prominence in business and investment circles. But what exactly does ESG mean?
They are the initials for environmental, social and governance, and these three pillars constitute a set of criteria by which companies are evaluated in addition to their financial performance.
The environmental pillar focuses on practices related to the environment, generally taking measures to minimize your carbon footprint, manage waste responsibly, and promote sustainable practices for the preservation of natural resources.
The social aspect addresses how a company impacts the surrounding communities and society as a whole. In other words, corporate social responsibility practices, diversity and inclusion, working conditions, and community engagement are some of the factors considered.
Governance refers to the leadership and management structure of a company, evaluating transparency in operations, the composition of the board of directors, ethical practices, integrity, and the way in which the company responds to shareholder concerns.
Thus, modern investors and consumers are increasingly aware that companies also have an important role in shaping the world around them.
They practice implementing sustainable policies, transparent disclosure of relevant information, and commitment to social initiatives.
In doing so, they not only meet growing consumer expectations, but they also attract investors who value social and environmental responsibility, in addition to contributing to a healthier planet, fairer communities, and ethical business practices.
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