What is ESG?

August 16, 2022
Tyson Collett

What is ESG?

     The acronym ESG (environmental, social, and governance) refers to a set of standards for a company’s behavior outside of typical financial metrics. The modern customer/investor cares about more than just the bottom line of the companies they put money into – they want to see that these companies are socially responsible as well as profitable. In fact, Harvard Business School claims that investors are significantly more likely to invest in companies with which they feel they share values. While it certainly makes financial sense for a company to abide by the principles of ESG, the reasons why a company should increase its social and environmental awareness go much deeper.

     For a company in 2022, ESG standards need to be more than a marketing technique used to attract more investors or buyers to a company. Many companies have the resources to make a real difference in the world, and ESG can be used as a plan of action in order to meet this lofty goal. As you read the following questions, consider selecting a few from each section and making a measurable goal to improve.


· Does my company have recycling/composting bins on our premises?

· How can my company reduce electricity use during the workday?

· Does my company promote public transport use and other methods to reduce carbon emissions?


· How does my company promote principles of diversity and inclusion in our hiring/promoting practices?

· How much does my company donate to non-profit organizations? Do we have a goal for how much we want to give to certain causes each year?

· What level of community involvement does my company have? How can we better promote principles of equality and inclusion to the public?


· How transparent is my company about administrative policy?

· How are your company’s values promoted among your employees?

· Is compensation at the executive level appropriate in comparison to your company’s revenue? In comparison to other employees?

     If you have questions about how you can help your company be a leader in the world of ESG, contact one of our experienced professionals at Sumsion Business Law. We can help you create a plan in order to succeed not only financially, but also with your environmental and social responsibilities.

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