Environmental, Social, and Governance – The 3 Pillars of ESG
What are the three pillars of ESG: Environmental, Social, and Governance?
Environmental, Social, and Governance are the three pillars that form the foundation of ESG. The Environmental pillar focuses on a company’s impact on the planet, including issues like carbon emissions, energy use, and waste management. The Social pillar addresses a company’s relationships with its employees, customers, and communities, covering labour practices, diversity, and human rights. The Governance pillar pertains to the internal systems of practices, controls, and procedures a company adopts to govern itself, including transparency, ethics, and compliance.
Does Environmental, Social, and Governance (ESG) include corporate governance?
ESG and corporate governance are closely intertwined. ESG is a broad framework encompassing environmental and social factors and governance. Corporate governance specifically refers to how a company is directed and controlled, involving practices like transparency, accountability, and ethical behaviour. ESG, on the other hand, integrates these governance aspects with environmental and social considerations to provide a holistic view of a company’s sustainability and ethical impact.
ESG simplified
ESG is a concept that helps stakeholders understand how an organisation manages risks and opportunities related to environmental, social, and governance criteria. It is not just about compliance or risk management; ESG is about creating long-term value and promoting corporate responsibility. For instance, environmental factors might include a company’s carbon footprint and resource usage, social factors could involve employee relations and community engagement, and governance factors would cover leadership, audits, and shareholder rights. By integrating ESG principles, companies can improve their sustainability performance and build trust with investors and other stakeholders.
CSRD and ESG in the EU
The Corporate Sustainability Reporting Directive (CSRD) is a significant regulatory framework introduced by the European Union to enhance and standardise sustainability reporting across companies. CSRD mandates a broader range of companies to disclose detailed information on their environmental, social, and governance (ESG) performance.
This directive is complemented by the European Sustainability Reporting Standards (ESRS), which provide specific guidelines on what and how companies should report their ESG data.
Ecobio Manager – upgrade from ESG software to all-in-one CSRD software
The ESG standards and frameworks can be complicated to navigate. Specialised software for sustainability reporting is needed to achieve the best results and compliance with, in the case of EU, CSRD.
Ecobio Manager has been designed to help companies streamline sustainability reporting, achieve compliance with CSRD and reach their ESG goals.
