ESG = Sustainable Investing

Business impact and is impacted by the environmental, social and governance issues. The ESG – acronym for Environmental, Social and Governance has steadily gained significance in the last decade as an indicator of a corporate’s growth performance, outlook, risk taking ability, profitability and sustainability.

Decoding ESG

Simply put, the ESG criteria of a corporate is:

Environmental – The natural resources consumed by a corporate, the effluents or waste it discharges and the consequent impact on the society. 

Key indicators: (including but not limited to below)

  • Consumption of water and power
  • Discharge of waste / effluents 
  • Air / water pollution 
  • Carbon emission / carbon footprint 
  • Waste management 
  • De-forestation  
  • Climate change
  • Re-cycling, use of recycled products in the course of work
  • Conservation of energy initiatives  


Social – relationship that the company maintains with people – employees, labour, vendors, other corporates, institutions and everyone it does business with. 

Key indicators: (including but not limited to below)

  • Employee relations 
  • Gender equality, diversity and inclusion 
  • Safety at workplace especially for women
  • Grievance redressal, especially committee for sexual harassment  
  • Health, medical and safety measures at workplace 
  • Child labour
  • Employment opportunities 
  • Customer care 

Governance – the internal policies and practices framed by the management of the company in running the company, statutory compliance policy.  

Key indicators: (including but not limited to below)

  • Composition of Board – diversity including women members 
  • Pay structure of the Board 
  • Political contribution if any
  • Indulgence in corruption including bribery.
  • Statutory compliance 

ESG basically indicates the profitability, value creation and sustainability of a business which has no or minimal negative impact on the environment or society.


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