ESG (Environmental, Social, Governance) Framework
By: A Staff Writer
Updated on: Jul 19, 2024
What: Factors used by socially responsible investors to screen companies. Environmental (carbon footprint, etc.), Social (labor practices, etc.), Governance (transparency, etc.).
Who: Evolved over time, various scoring systems exist (MSCI, etc.).
Why: ESG investing is HUGE, so access to capital is at stake. Entrepreneurs should care even if their own heart isn’t in it.
When: When seeking funding, reporting to stakeholders, or when comparing yourself to competitors.
How:
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- Track your own ESG metrics, even if not externally reported.
- Use an established reporting framework to be credible.