Investors looking for companies to invest in are increasingly looking at ESG scores. The term ESG refers to "Environmental, Social and Governance" and is used as an assessment of how the company addresses sustainability. The organization's environmental, social and corporate governance responsibilities are closely examined for this purpose.
For example, how a company handles energy and raw materials is examined. But sustainability also includes the proper handling of human capital: the employees. Is there sufficient equality, diversity and safety within the organization? Finally, executive compensation, internal hierarchy, corruption prevention and financial structure, among others, constitute the policy and financial corporate governance.
Sound business practices that have positive effects on both employees, customers, the environment and society would achieve better returns and are therefore of interest to investors. The ESG criteria make these ethical issues measurable.
Corporate Social Responsibility
Like sustainability, corporate social responsibility is a common term. The three components of ESG make the social contribution transparent. According to investors, the ESG score gives a good indication of potential financial results and risks in the future.
People, planet and profits
In the 1990s, PPP was introduced: "People, planet and profits" refers to the idea that a company should be concerned not only with making profits, but also with people and the environment. This term is also called the "Triple Bottom Line" and is considered the precursor to ESG.
ESG and SDG’s
ESG can help companies achieve Sustainable Development Goals (SDGs). These 17 globally set goals are to make the earth a better place by 2030. Not only is the environment on the agenda, but also issues such as poverty, education and equality. By designing business operations according to ESG, a company can also make a positive contribution to the SDGs.
What is ESG reporting?
Starting in 2024, the European Corporate Sustainability Reporting Directive (CSRD) will apply, requiring companies to report on sustainability. Environmental, social and governance data will be provided in an ESG report.
On the road to profitable sustainability with Milgro
Milgro is concerned with the ESG criteria in its daily operations. And translates the ESG criteria for its clients into profitable sustainability. With our services and tools, we improve and make your processes more sustainable in terms of waste, wastage and raw materials. This way we save time and money for our clients, but also deliver ecologically positive results. Our motto is earth and earn together. And that is what the results also show: an ESG policy offers profits in both the long and short term. Both ecologically and economically.
How to get started with ESG criteria?
Milgro can help you with the "E" of Environmental. Do you want to make a positive impact on the environment? Data on waste is not yet insightful at many companies. With Milgro's digital waste process, we contribute to this insight through data technology. The experts of Milgro help you with insight into and thus control of your resource use. Through a dashboard you will discover the impact of your business and easily prepare reports. So you are well prepared for new European legislation, such as the CSRD.
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