ESG stands for Environmental, Social, and Governance. It's a framework that helps stakeholders understand how an organization is managing risks and opportunities related to these three key factors. ESG takes a holistic view that sustainability extends beyond just environmental issues.
Strong ESG performance leads to preferential treatment from investors compared to companies whose environmental or other practices may pose a greater financial risk. Moreover, ESG investing refers to a set of standards for a company’s behavior used by socially conscious investors to screen potential investments.
