ESG standards (Environmental, Social, and Governance) are a set of criteria used to evaluate the environmental, social, and governance impact of a company or organisation. They go beyond financial aspects, measuring the extent to which an economic activity is sustainable and responsible
Meaning of the acronym:
- E – Environmental: efficient use of resources, carbon emissions, waste management, renewable energy, impact on biodiversity.
- S – Social: relationships with employees, customers, and communities; diversity, inclusion, working conditions, respect for human rights.
- G – Governance: business ethics, transparency, board structure, anti-corruption measures, compliance policies.
Main goal:
To help investors, regulators, and society identify organisations that create long-term sustainable value, minimise environmental and social risks, and adopt good governance practices.
Example of use:
An investment fund may apply ESG standards to select companies that reduce CO₂ emissions, promote gender equality, and have transparent management mechanisms.
Usage note:
The acronym ESG is also used in Catalan and Spanish without translation, but it is sometimes explained as environmental, social, and governance criteria.
