What is ESG?

"ESG" (Environmental, Social, and Governance) is a term used in the capital markets and by investors for non-financial indicators that measure the performance of companies in the areas of environment (Environmental), social performance (Social), and proper governance (Governance).

These indicators include things like energy efficiency, greenhouse gas emissions, employee turnover, training and qualifications of employees, legal risk, corruption, and revenue from new products. Specific benchmarks have been drawn up per sector to measure the ESG performance of companies.

ESG is important for investors who want to integrate sustainability and social responsibility into their investment decisions, as it provides insight into how companies manage their impact on the world and their long-term business operations.