ESG Terminology


Environmental, Social and corporate Governance (ESG)

criteria are crucial indicators of good corporate management and the corporate ability to enhance societal welfare and generate shareholder value. Learn more here: responsible-investor.com

Responsible Investment (RI)

describes an array of investment strategies which integrate ESG criteria into asset allocation, asset selection and/or asset ownership decision making to enlighten and enhance long term value creation. Learn more here: unpri.com

Corporate Social Responsibility (CSR)

is a management concept aiming to create goodwill between the corporation and society. Learn more here: unglobalcompact.org

Sustainable Development

is the idea that human activity should not exploit natural resources beyond the threshold of renewability to ensure that human needs can be met for all generations to come. Learn more here: cpsl.cam.ac.uk

Corporate Governance

describes the policies and processes aiming to align managerial activity with the stated objective of the corporation in its societal context. Learn more here: icgn.org

ESG Themes


Anti-Corruption / Transparency

to gain trust among stakeholders and shareholders, it is crucial for companies to have high standards of transparency and effective anti-corruption policies and practices. Read more here: transparency.org

Child Labour

as simple moral obligation, firms should always operate in ways which support children and their education and, under no circumstances, abuse children. Read more here: un.org

Climate Change

in light of overwhelming scientific evidence of climate change as consequence of industrial activity (www.realclimate.org), corporations are well advised to reduce their impact on the global climate to preserve societal goodwill and address upcoming legislation. Read more here: iigcc.org

Employee Relations

corporations are essentially networks of thousands of processes executed by individual employees whose extrinsic and ideally intrinsic motivation, integrity and loyalty is crucial for success. Read more here: greatplacetowork.com

Executive Remuneration

refers to the compensation schemes that top-level managers receive. A very interesting question is, to what extent these schemes relate to actual success in terms of long term value generation for shareholders and enhancement of societal well being. Read more here: aflcio.org

Human Rights

for individuals as for corporations, it is essential to respect human rights and comply with respective international laws to preserve self respect and prevent repercussions. Read more here: hrw.org

Human Trafficking

as moral and legal obligation, firms should not be involved or implicitly support human trafficking. Read more here: unodc.org

Integrated Reporting

describes corporations which feature ESG criteria prominently in their reporting for shareholders and society. Read more here: theiirc.org

Integrity

as for individuals, it is essential for corporations to honour its word to develop trusted, efficient and effective relationships with business partners and society. Read more here: hbs.edu

Pollution

in todays society pollution is not a trivial offence anymore. Firms polluting the environment are facing substantial legislative and reputation risks. Read more here: greenpeace.org

Women on Boards

good risk management practices suggest to have diverse views represented on corporate boards. Hence, corporations are well advised to have a healthy proportion of women on their boards. Read more here: catalyst.org