Recall that ESG is an acronym that stands for Environmental, Social, and Governance. These are the three main components that are used to assess the sustainability and responsibility of companies.
The environmental component of the ESG includes all aspects related to a company's environmental responsibility, its impact on the environment and its relationship with society. This may include:
Use of energy and resources: The company must manage its resources in such a way as to maximize efficiency and minimize the use of non-renewable energy sources.
Environmental pollution: The company must comply with environmental safety standards and minimize its harmful contribution to the environment, for example, by reducing emissions into the atmosphere or recycling waste.
Environmental innovation: The company must introduce new technologies and methods that help reduce the negative impact on the environment. Here it is important to look for the most up-to-date solutions, analyzing and applying the best international experience.
Social responsibility: The company must consider the interests of its stakeholders. Stakeholders include both customers and employees of the company, as well as the local population of the region of presence.
Compliance with Laws and Regulations: The Company must comply with laws and regulations related to environmental protection and act in accordance with these regulations. Even if no violation is found or a fine is paid, the reputational consequences for a company claiming to be ESG can be devastating.
Transparency and accountability of business conduct: The principle of openness and verifiability of information equally applies to all components of the ESG concept. Environmental reporting should reflect objective information about the extent of the company's impact on the environment, as well as possible risks and ways to minimize them.