What Are ESG Ratings?
Environmental, Social, and Governance (ESG) ratings measure a company’s exposure to long-term sustainability risks and how effectively management mitigates those risks compared to industry peers.
The Three Pillars
- Environmental (E): Greenhouse gas emissions, water stewardship, biodiversity impact, clean technology transition, and toxic waste management.
- Social (S): Labor practices, workplace health and safety, supply chain human rights, data privacy, and community relations.
- Governance (G): Board independence, executive compensation alignment, shareholder rights, accounting integrity, and anti-corruption policies.