It wasn’t long ago that a company’s financial performance in the market used to be the sole metric that mattered to investors. However, that perspective changed dramatically following the publication of an IFC report in 2005 entitled “Who Cares Wins” which brought to light the impact ESG had on a company’s long-term sustainability. These non-financial standards can be used to quantify a company’s behaviour in the market by assessing their impact on various Environmental, Social, and Governance issues.
A company’s environmental standards include its policies on the usage of clean energy, conscious waste management, efforts towards achieving net-zero emission norms and promoting sustainable development. The social aspect focuses on a company’s social relationships including its management, human rights standards, work environment, employee health, and diversity, equity, and inclusivity (DEI). Finally, the governance criteria encompass corporate accountability, compliance, and relationships with stakeholders.
