What is ESG in simple words?

In today's business landscape, ESG, which stands for Environmental, Social, and Governance, represents a framework of policies or standard operating procedures adopted by companies to amplify positive impacts and mitigate negative effects across these three dimensions.

Socially conscious investors utilize these procedures as screening tools to assess the suitability of potential investments.

The environmental criteria assess how well a company acts as a steward of nature, while the social criteria evaluate its management of relationships with employees, suppliers, customers, and local communities.

Governance criteria focus on aspects such as company leadership, executive compensation, audits, internal controls, and shareholder rights. By considering all these criteria, a company can develop a comprehensive framework to evaluate its impact on society and the environment, as well as its overall sustainability and ethical conduct.

Why is the business world placing significant importance on ESG factors nowadays?

Lately, investors have increasingly recognized the significance of ESG criteria when making investment choices. Consequently, numerous businesses have started incorporating ESG principles into their operations and strategic planning.

ESG investing is also known as sustainable investing, responsible investing, and impact investing. When evaluating ESG criteria, investors consider a wide array of behaviors, policies, and procedures implemented by the company.

ESG investors prioritize companies that demonstrate responsibility towards the environment, act as good corporate citizens, and are led by accountable employees.

What factors do sustainable investors take into account when evaluating potential investments?

In assessing environmental impact, investors scrutinize corporate practices regarding climate impact, energy consumption, pollution mitigation, natural resource preservation, treatment of animals, and waste disposal. This evaluation encompasses aspects such as greenhouse gas emissions, handling of hazardous waste, and adherence to environmental laws.

In examining the social aspect, investors focus on both internal and external stakeholders. They assess whether the company allocates a portion of its profits to the local community and encourages employee involvement in societal welfare initiatives. Furthermore, they consider workplace conditions that prioritize the health and safety of employees.

Finally, in the realm of governance, investors evaluate whether a company employs precise and transparent accounting practices, promotes integrity and diversity in leadership selection, and remains accountable to shareholders.

They seek assurance that companies steer clear of conflicts of interest in appointing board members and senior executives and refrain from leveraging political contributions for preferential treatment or illicit activities.

Final Words on ESG

In essence, ESG serves as an assessment method encompassing environmental, social, and governance concerns. Within the private sector, it comprises a set of standards employed to assess a company’s risks and behaviors. This framework plays a vital role in aiding sustainable investors in gauging a company's alignment with their principles and analyzing its overall value for their investment objectives.

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

#Thk

#KTP

全名 *
邮件 *
联络电话 *
公司名字
公司地址
标题 *
我们如何可以帮助您？ *