esg investing

What Are the Key Components of ESG?

The key components of ESG are:
1. Environmental: This includes a company's impact on natural resources, carbon footprint, waste management, and energy consumption. Investors look for companies that actively minimize their environmental impact.
2. Social: This focuses on a company’s relationships with employees, customers, suppliers, and the communities where they operate. Issues like labor practices, diversity and inclusion, and community engagement fall under this category.
3. Governance: This component evaluates the company’s leadership, executive pay, audits, internal controls, and shareholder rights. Strong governance ensures that the company is well-managed and accountable.

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