ESG. Why do these three letters sound around more and more often and what do they mean?

ESG. Why do these three letters sound around more and more often and what do they mean?

As part of the new direction of development of Index Consulting Company, we are launching a new column "ESG Mondays". In this section, we will introduce readers to the latest international trends in the field of sustainable development.
ESG principles are becoming an increasingly important element of the global financial system, able to smooth out the contradictions between the rapid growth of production and consumption on the one hand and the climate challenges of modernity on the other.

The address of the UN Secretary-General Kofi Annan in January 2004 was titled as follows: "Who cares wins". It was a call to the heads of the 50 largest financial institutions in the world to include the principles of ESG (environmental friendliness, social orientation and quality of corporate governance) in their business development strategies.

In a broad sense, ESG means that companies take into account the following principles of sustainable development when conducting their activities:

•  E - Environment. Responsible attitude to the environment;
•  S - Social. High social responsibility;
•  G - Governance. Efficiency and quality of corporate governance.

Today, leading international companies understand the importance of including ESG principles in strategic documents. This allows companies to more effectively evaluate the results of activities in each of the areas and find the “weak” points existing in their business.

It is also important to take into account that the development and presentation of ESG strategies of the company, as well as reports on sustainable development, can become both an independent information occasion, and contribute to the work of attracting investments, increasing the loyalty of advanced customers and developing the employer's brand.