Kembara's Financial Solutions - Factors affecting environmental, social, and governance (ESG)1/20/2023 Kembara's Financial Solutions - Factors affecting environmental, social, and governance (ESG)
Environmental, social, and governance, or ESG, has grown in significance over the past few years. ESG and ethics are related because it determines whether a corporation is "doing the right thing" with regard to its effects on the environment, the society in which it operates, and its governance. Because businesses are corporate entities, governance is frequently referred to as corporate governance. Here are some examples of what might be evaluated: • Environmental criteria: • The amount of energy the business consumes and its commitment to energy conservation. • The degree to which the business reduces waste and pollution. • The company's conservation initiatives and the effect they have on the environment. The amount to which the business supports its neighborhood is a social criterion. • The business's donations to charities. • How highly the workforce's health and safety are valued. • The principles upheld and demanded of the company's suppliers, such as their treatment of workers and working conditions. The company's management and board of directors should be diverse in terms of age, experience, ethnicity, and gender. Additionally, there should be a balance between executive directors (who make day-to-day decisions) and non-executive directors (acting in a more consultative capacity). the standards of moral behavior expected by the workers, especially senior management.
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